The World Bank

Document of The World Bank

FOR OFFICIAL USE ONLY Public Disclosure Authorized

Report No. 3649-IND

STAFF APPRAISAL REPORT

INDONESIA Public Disclosure Authorized

SIXTEENTH IRRIGATION PROJECT

Public Disclosure Authorized March 3, 1982 Public Disclosure Authorized Projects Department East Asia & Pacific Regional Office

This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS

US$1.00 = Rupiahs (Rp) 625 Rp 100 = US$0.16 Rp 1 million = US$1,600

WEIGHTS AND MEASURES - tETRIC SYSTEM

1 millimeter (mm) = 0.039 inches 114 1 meter (m) = 39.37 inches 1 kilometer (kTn) = 0.62 miles 1 square kilometer (sq km) = 0.386 square miles 1 hectare (ha) = 2.47 acres 1 cubic meter (cu m) = 35.31 cubic feet 1 million cubic meters (MCM) 811 acre feet 1 liter (1) = 0.264 gallons (USA) 1 liter/second (1/sec) = 0.035 cubic feet per second 1 kilogram (kg) = 2.2 pounds 1 metric ton (ton) = 2,205 pounds

CONVERSION FACTORS FOR RICE

1 ton paddy (gabah) = 630 kg milled rice

INDONESIAN FISCAL YEAR

April 1 - March 31

ABBREVIATIONS

GOI - Government of Indonesia BULOC - National Food Procurement and Distribution Agency BAKOSURTANAL - National Agency for Coordination of Survey and Mapping DGH - Directorate of Highways (in MPW) DGFCA - Directorate General of Food Crops Agriculture (in Ministry of Agriculture) DGWRD - Directorate General of Water Resources Development (in MPW) DOI - Directorate of Irrigation (in DGWRD) DPMA - Directorate of Hydraulic Engineering (in DGWRD) DPP - Directorate of Planning and Programming (in DGWRD) INPRES - Revenue-sharing grant programs from GOI to provincial, district and village authorities IPEDA - Land Tax MPW - Ministry of Public Works O&M - Operation and Maintenance PIBD/PROSIDA - Special agencies within DGWRD responsible for implementing Bank Group-assisted water resource projects FOR OFFICIAL USE ONLY

PREVIOUS IRRIGATION PROJECTS

Project No. Ln./Cr. No. Year approved Ln./Cr. Amount US$ million

I Cr. 127-IND 1968 5.0 II Cr. 195-IND 1970 18.5 III Cr. 220-IND 1970 14.5 IV Cr. 289-IND 1972 12.5 V Cr. 514-IND 1974 30.0 VI Ln. 1100-IND 1975 65.0 VII Ln. 1268-IND 1976 33.0 VIII Ln. 1434-IND 1977 63.0 IX Ln. 1435-IND 1977 35.0 X Ln. 1578-IND 1978 140.0 XI Ln. 1579-IND 1978 31.0 XII Ln. 1645-IND 1978 77.0 XIII Ln. 1691-IND 1979 50.0 XIV Ln. 1811-IND 1980 116.0 XV Cr. 995-IND 1980 45.0 Swamp Reclamation I Ln. 1958-IND 1981 22.0

Total 757.5

INDONESIA

APPRAISAL OF THE SIXTEENTH IRRIGATION PROJECT

Table of Contents

Page No.

1. BACKGROUND ...... 1

General .1...... 1 The Agricultural and Rural Sector ...... 1 Development Strategies. 2 Bank Assistance to the Irrigation Subsector ...... 4 Performance Audits on Completed Projects ...... 5 Bank Review of DGWRD Operations and Performance . . . . . 6 Disbursement Performance and Trends ...... /. . 8 Project 'Formulation .. 8 Policy and Institutional Objectives ...... 10

2. PROJECT AREAS ...... 12

Location .12 Climate .12 Topography, Drainage and Soils ...... 12 Population, Farm Sizes and Land Tenure ...... 12 Water Supply and Demand ...... 13 Existing Works .14

3. THE PROJECT ...... 14

Project Description ...... 14 Project Works .. 14 Status of Preparation .. 17 Implementation Schedule ...... 18 Consulting Services .. 18 Cost Estimates .. 20 Financing .. 20 Procurement .. 20 Disbursements .. 24 Accounts and Audits ...... 24 Environmental Impact .. 25

4. ORGANIZATION AND MANAGEMENT ...... 26

Operations and Maintenance .. 26 Monitoring and Evaluation ...... 26 Page No.

5. AGRICULTURAL PRODUCTION...... 27

Crop Production Changes ...... 27 Drying, Storage and Processing ...... 32

6. MARKET PROSPECTS, PRICES, FARM INCOMES AND PROJECT CHARGES . 33

Market Prospects ...... 33 Prices ...... 33 Farm Incomes ...... 36 Project Charges...... 37

7. BENEFITS AND JUSTIFICATION ...... 39

Project Benefits and Beneficiaries ...... 39 Major Assumptions Used in Economic Analysis...... 39 Economic Rates of Return ...... 41 Sensitivity Analysis ...... 41 Risks...... 42

8. AGREEMENTSAND RECOMMENDATIONS ...... 44

LIST OF TABLES IN THE MAIN REPORT

2.1 Average Monthly Discharges for Batang Hari, Siat and Piruko for Various Frequencies ...... 13

3.1 Land Clearing at Sitiung II ...... 15 3.2 Consulting Services ...... 19 3.3 Project Cost Summary (End-1981 Prices)...... 21 3.4 Sitiung II Contract Packages ...... 22 3.5 Summary of Equipment...... 23

5.1 Cropping Pattern, Yields and Production ...... 28 5.2 Land Use .31 5.3 Cropping Intensities .32

6.1 Price Structure for Foodcrops and Fertilizers ...... 34 6.2 Input and Output Price Summary...... 35 6.3 Summary of Farm Incomes .36 6.4 Cost and Rent Recovery Indexes ...... 38

7.1 Economic Benefits at Full Development ...... 39 7.2 Economic Construction Cost...... 41 7.3 Sensitivity Analysis - Comparison of Values at Appraisal and Crossover for a 10% Discount Rate . . . . . 43 - iii -

ANNEXES

1 Cost Estimate (Table 1) Schedule of Expenditures (Table 2) Proposed Allocation of Loan Proceeds (Table 3) Estimated Schedule of Disbursements (Table 4) Civil Works - Quantity and Unit Price - Estimates (Table 5) List of Equipment (Table 6) Consulting Services - Categories and Estimated Schedules (Table 7) Consulting Services - Cost Breakdown (Table 8)

2 Crop Budgets (Table 1) Farm Budgets (Table 2) Crop Economic Benefits (Table 3) Economic Costs, Benefits and Rate of Return (Table 4) Rent Recovery for Average Farms (Table 5)

3 Schedule of Early Events

4 Climate and Hydrological Data (Tables 1-3)

5 Training for Water Users in Tertiary Irrigation O&M

6 Statements of Expenditure

7 Related Documents and Data Available in Project File

LIST OF FIGURES

1.1 DGWRD Organization 1.2 Water User Support Organization 3.1 Construction Schedule 4.1 Water User Training

LIST OF M1APS

IBRD 16003R - Sitiung II Subproject IBRD 16039R - Indonesia Irrigation Project XVI

1. BACKGROUND

General

1.01 Indonesia'sdrive towards achievinggreater self sufficiencyin food supply focusses on increasingrice production through greater use of fertilizers;better pest-resistantvarieties; expanded extensionand research services;continued upgradingand rehabilitationof existing irrigationsystems includingtertiary networks,drainage and flood protectionworks; and constructinga series of dams to provide dry season irrigationwater, hydropower,and flood control. Indonesiahas about 4 million ha under irrigation. Over the last few years Indonesiahas initiatedeach year the rehabilitationand upgrading of about 100,000 ha of existing irrigation systems,construction of about 50,000 ha of new systems, and installationof river control, flood protectionand swamp reclamationworks to improve about 130,000ha of agriculturalland.

1.02 Extensiveuse is being made of foreign assistance for the large irrigationimprovement program, especiallyfrom the Bank Group which has so far made available$757.5 million through 15 loans or credits for irrigationand one loan for swamp reclamation. The Bank has an important role in irrigationpolicy, setting standardsfor studies,engineering design and construction,and in assessing investmentpriorities. IncreasinglyBank assistancehas emphasizedinstitutional building particularlyof the DirectorateGeneral of Water ResourcesDevelopment (DGWRD). For the proposed sixteenth irrigationproject GOI has requestedBank Group assistancefor further strengtheningDGWRD; trainingwater users; for studies and engineeringdesign of two major subprojectsin Central and West Java for future construction(Cisanggarung and Jatigede);and for extending irrigationsystems to serve about 7,600 ha at Sitiung,which straddlesthe boundary betweenWest Sumatra and Jambi Provinces. The projectwas appraised in May 1981 by a mission composed of Messrs. Naor, Hewson, Sun (Bank),Sugimura (FAO/BankCooperative Program) Rudd and Oad (Consultants).

The Agriculturaland Rural Sector

1.03 Objectives. The Government'smajor objectivesfor the agricultural and rural sector are to: (a) create productiveemployment to raise incomes of the rural poor; (b) increase domestic food supply to keep pace with rising demand; (c) expand agriculturalexports particularlyof smallholder tree crops; and (d) ensure productive,sustainable use of Indonesia's varied land, water and other natural resources. -2-

1.04 Despite a 4% average annual growth of production,agriculture's share of GDP has declined from 40% to 30% since 1968, while its share of exports dropped from 45% to 33% due mainly to the markedly increasedvalue of oil exports. Nevertheless,the agriculturaland rural sector remains of overwhelmingimportance to the great majority of Indonesians;nearly 80% of the populationlives in rural areas, and agricultureis the major source of income for about two-thirdsof rural households and one-tenthof urban households. Some 15.6 million smallholderfamilies produce subsistenceand cash crops on 15.8 million ha, while 1,800 estates occupying2.2 million ha produce mainly rubber, sugar, tea, palm oil, and tobacco.

DevelopmentStrategies

1.05 Employment. Agriculture'sshare of total employmentdecreased from 69% in 1961 to 64% in September 1971, while in 1978 it accounted for 61% of total employment./1 Nevertheless,agriculture remained by far the largest single source (with 42%) of new employment during 1971-78. Outside Java, employmentprospects in agricultureappear quite promising,given the sustainedincreases in the smallholderarea, due to land reclamationand irrigationdevelopment, including both Government-sponsoredand spontaneous transmigration. In Java, rehabilitationof irrigation systems, which generatedsignificant employment in the last decade, should continue to provide additional constructionand farm work.

1.06 Food Crops. Given its limited manpower and financialresources, GOI has concentratedon increasing the production of rice, the preferred staple food of the great majority of Indonesians. Rice productionincreased rapidly (4.5% p.a.) between 1968 and 1974, chiefly due to irrigation rehabilitationand the provisionto irrigatedrice growers of fertilizerand high-yieldingvariety seed, financed largely through the BIMAS credit program. The growth rate slowed markedly to 1.7% p.a. over 1974-77, in the wake of severe declines in fertilizerusage (due to restrictionson private sector fertilizertrade), successiveseasons of untimely rainfall, and unprecedentedattacks by pests and diseases, principallythe brown plant hopper and associatedviruses. In 1978 rice production increasedby 10% with favorableweather, improved and liberalizedfertilizer distribution, and nationwideGovernment-sponsored distribution of recently introduced pest-resistantvarieties. Rice productionin 1979 increased only 2% over 1978 due, mainly, to insufficientrainfall but 1980 saw one of the largest proportionalincreases (13%) in national rice productionsince records have

/1 Seasonal fluctuationscan be seen from the share of agriculturalemployment in March of 1976 ranging between 63% in Java and 72% in the Other Islands. The correspondingfigures in October were 57% and 66%, respectively. These seasonal differencesrepresented a drop of 6.7 million workers in agriculturalemployment. been kept. Production exceeded 20 million tons milled rice equivalent and rice imports declined to about 1.4 million tons or 15% of world imports, a considerable turnaround from the previous three years. The estimated production for 1981 is 21.6 million tons. Over the past decade, output of secondary food crops (maize, cassava, soybeans, peanuts, and sweet potatoes) grew more slowly, at an average of only 1.6% p.a., composed of a 1.1% p.a. average decline in area (much of this land shifting to irrigated rice) and a 2.7% p.a. increase in yield.

1.07 Tree Crops. The Government has embarked on a major effort to develop smallholder tree crops outside Java as part of its national rubber and coconut replanting and transmigration programs. The objective is to improve production in existing plantations while developing large areas of new land for settlement. One of the Government's main approaches has been to use public estate companies to plant tree crops on land to be settled by local landless families as well as by transmigrants. These companies clear the land and provide settlers with planting material, other inputs, processing and marketing facilities. This approach is appropriate in view of constraining management and technical capabilities.

1.08 Future Strategy. To prevent a widening food production consump- tion gap, productivity and area under rice and secondary food crops must be increased. In Java, rice-cropping intensity could be raised through water storage, ground water development, and flood control projects although relocation of inhabitants of reservoir sites may delay progress. Yields and cropping intensity can also be increased by improving water management at all levels which will require increased O&M efforts of government-operated and farmer operated systems. In the Other Islands there is potential for new irrigation and swamp reclamation schemes which GOI is in the process of developing. Yields of existing varieties of secondary food crops could be increased by improved husbandry, including fertilizers and insecticides. GOI is just beginning to give serious attention to varietal improvement of such crops.

1.09 Area Development and Transmigration. In 1980, about 88 million people lived in Java, at a density approaching 650 persons/sq km. The island, with 7% of Indonesia's land area, has 45% of the cropped area and 63% of the population. Java generally has more fertile soils and better infrastructure than the Other Islands; however, its cultivable land is almost fully utilized. In some watersheds cultivation already exceeds ecologically safe limits, contributing to increasing erosion, flooding, and siltation of reservoirs, irrigation canals and ports. GOI is preparing integrated watershed development projects to address this problem. The primary program for new area development in the Other Islands, as well as for creating employment and settlement nuclei for Javanese migrants, is transmigration. An organized transmigration program is important for regional and natural resource development in the Other Islands, production of food and export crops, and creation of employment and decent living conditions for landless Javanese. - 4 -

1.10 Role of Government. While the private sector should be encouraged to expand its role in agriculturalinput supply,marketing, and processing, Government continues to bear the major responsibilityfor infrastructure, resource conservation,and other services. Despite marked improvementsover the past decade, technicaland managerial manpower constraintscontinue to impede planning and rapid implementationof agriculturaland rural development, includingirrigation and drainage works. GOI must thereforecontinue to strengthenits key rural developmentinstitutions, particularly through education, recruitment,training and retentionof technicalmanpower.

I 1.11 Bank Lending for Agriculture. Since the first of 16 irrigation and swamp reclamationprojects was approved in 1968, the Bank Group-s agriculturallending has rapidly expanded to include estate and smallholder tree crops, fertilizer productionand distribution,sugar, livestock, fisheries,research, extension,training, seeds, transmigration,and resource survey and mapping. The Operations EvaluationDepartment-s Sector Operations Review of Bank Group agriculturallending in Indonesia (Report No..2166, dated August 9, 1978) concluded that despite deficienciesin some projects, the Bank's portfoliowas "of overall good quality and likely to contribute substantiallyto increased production." Within the context of GOI's agriculturalobjectives and priorities,as outlined in Repelita III, future Bank lending is expected to focus on:

(a) irrigation,water storage,drainage and flood protection to intensify rice cropping on Java and to expand water resources infrastructureincluding swamp reclamationin the Other Islands;

(b) smallholderand nucleus estate tree crop planting programs including industrialforest estates; and

(c) area developmentprojects aimed at (i) watershed management to conserve soil and ensure long-termproductivity in the densely populated areas of Java; (ii) rural works programs;and (iii) transmigration.

Bank Assistance to the Irrigation Subsector

1.12 The Bank has provided $757.5 million for project assistance in irrigationand has played a significantrole in Indonesian irrigation developmentsince 1968 (Map IBRD 16039). The earliest Bank supported irrigationprojects were designed to rehabilitatemajor systems to quickly increase rice production. Later projects upgraded existing systems and financed drainage and flood protectionworks and tertiary networks. There has been little constructionof new systems. Studies supportedby the Bank for possible investment in the next few years include large storage dams to serve existing irrigation system. Bank assistancewas channeledthrough two special agencies /1 of the DirectorateGeneral of Water Resources

/1 PROSIDA and PIBD -5

(DGWRD)which were set up to implementBank projects,but now supports also operationsof the Directorateof Rivers, (Loan 1691-IND)the Directorateof Swamps (Loan 1958-IND),and the Directorateof Planning and Programming(Cr. 995-IND).

PerformanceAudits on CompletedProjects

1.13 The first four Bank-assistedirrigation projects have been completed and performanceaudits issued./l The most serious problemswere constructiondelays and cost overruns. Delays arose mostly because of GOI's unfamiliaritywith internationalprocurement procedures, cumbersome local bidding, contractingand fund release procedures,and shortage of local funds. Cost overrunswere due to additionalquantitities of work found to be needed followingdetailed design, and increasedunit costs from unexpectedlyrapid inflationand constructiondelays. However, these cost increaseswere more than offset by higher rice prices. Although it is not possible to disaggregatebenefits between irrigationand supportingservices due to concurrentand subsequentprojects, economic rates of return of the four projects are expected to exceed 40%.

1.14 These lessonswere taken into account in formulatingand implementing subsequentprojects. Appraisalquantity and cost estimatesare now based on final designs for at least the first year's work program and major structures. Multi-year contractswith price escalationprovisions, standard contract documentsand standard bid evaluationprocedures have been introduced togetherwith mobilizationand prompt payment provisions. Other problem areas being tackled include: improvingeffective operation and maintenanceservices (O&M) at the provinciallevel; providing technicaland administrativesupport to water user associations;and promotinggreater efficiencyin water use.

1.15 In recent Bank assisted irrigationprojects, measures have been taken to improve O&M includingproviding adequate staff; and increased and timely budgetary support. These measures improvedO&M funding, but not standards. Specific proposals to improve O&M in East Java Province are included in the proposed seventeenthirrigation project and may be proposed in later projects for other provinces. The importanceof ensuring farmer commitment to tertiary developmentwas recognizedfrom the first tertiary subprojectsupported by the Bank (Ln. 1268-IND). Water user associations are establishedbefore starting tertiaryconstruction and later collect member contributions,normally in kind after each harvest for O&M. Actions are included in the project to provide better trainingand support for such water user assocLations(paras 3.06, 8.01f and Annex 5).

/1 Credit 127-IND, PPAR Report No. 2047, May 1978. Credits 195, 220 and 289-IND, PPAR Report No. 3269, December 1980. - 6 -

Bank Review of DGWRD Operations and Performance

1.16 In 1975 and 1978 the Bank reviewed GOI's irrigation program, its contribution to national food supply, and the ability of DGWRD to expand its activities./l These reviews reported on the remarkable success of DGWRD and the ability and energy of its senior staff, but concluded that the present staffing and organizational structure of DGWRD needed further strengthening.

1.17 Although measures have been taken to accelerate project implementation since then, many projects still suffer delays, primarily during the startup period. Bank Group experience since 1978 confirms that the present DGWRD implementation capacity limits project and disbursement performance. The major causes of delayed implementation identified during supervision and the actions taken to address them are discussed below.

(a) Delays in land acquisition. Possible Bank assistance is being discussed to strengthen the Directorate General Agraria (DGA), which is responsible for land acquisition and registration. Measures have been agreed to use private surveyors or DGWRD surveyors where DGA capacity is presently insufficient. Assurances were obtained during negotiations that all land rights required for construction would be acquired in the year preceding construction (para. 8.01b)

(b) Inadequate contractor capacity and construction standards. A project to assist contractors through training and to improve supervision of construction contracts has been prepared by the Ministry of Public Works and is being appraised by the Bank. The Bank is also assisting GOI to review construction industry policies and procedures;

(c) Difficulties with surveying and mapping. The Bank has recommended improvements for quality standards and procedures. Equipment to expand and modernize surveying and mapping, and training of contractors and DGWRD supervisory staff is being provided under Irrigation XV (Cr. 995-IND). The GOI has also agreed that the National Agency for Coordination of Survey and Mapping (BAKOSURTANAL) will oversee all GOI agencies' large-scale mapping needs, monitor available photography and mapping capacity, and increase capacity if needed (Section 4.09 of Loan Agreement 1972-IND);

(d) Delayed fund releases. GOI's budget system and fund release procedures have been improved, and training in procurement and disbursement procedures given to staff. Measures to improve budget processes in DGWRD have been initiated; and

/1 The Irrigation Program Survey (No. 705-IND), April 15, 1975 and the Irrigation Program Review (No. 2027a-IND), October 16, 1978. - 7 -

(e) Reduced DGWRD annual budget allocations._ GOI allocations for the irrigation sector have not kept pace with expectations of the Third Five-Year Plan and increasingly projects have been delayed. There is an overall shortage of funds for the sector program, and not enough flexibility for DGWRD to quickly divert funds during the budget year from slower moving projects to those which need more.

1.18 These steps to improve project implementation performance have been accompanied by an increasing dialogue between the Bank and GOI towards strengthening DGWRD's institutional capacity. The critical areas being addressed are:

(a) improving planning and programming, and the budget system to concentrate available financial resources on priority irrigation investments. DGWRD project appraisal capacities are being established, a coordinating unit for benefit monitoring and evaluation is being strengthened, and appropriate economic criteria are being determined for project selection and preparation;

(b) improving the flow of management information related to resolving problems of project implementation, including procurement and construction progress so that managers can take earlier remedial actions whenever necessary;

(c) reducing the administrative and executive burden on the Director General, and increasingly delegating responsibilities. Several alternative structural changes are under consideration by GOI;

(d) progressively reducing the extensive use of foreign consultants employed by DGWRD for feasibility and engineering design work, and to a lesser extent for construction supervision; and

(e) reviewing the DGWRD work program and budgets proposed from 1982/83 to 1988/89 and the relevant institutional implications.

1.19 Institutional strengthening has become an increasing objective of Bank assistance. Bank inputs will also seek to address policies and procedures which could improve the sector program or accelerate project implementation. While the institutional strengthening now started is progressing, lending, which will include increasing cofinancing, will focus on technically complex projects where high design standards must be set, or difficult economic choices made. These measures are designed to move progressively towards sector lending. Disbursement Performance and Trends

1.20 Disbursements of previous Bank irrigation Loans reflect the delayed project implementation schedules. Currently, cumulative disbursements (Irrigation V-XV) run at about 55% of appraisal estimates, with little difference between projects. This performance is in line with experience for Irrigation Projects supported by the Bank in the Region, and with other sectors in Indonesia. Progress has been made in improving disbursements (which were below 50% in FY80) through more intensive supervision by the Bank's staff resident in Indonesia, the use of statements of expenditures for small civil works contracts, and by accelerating start up activities of new projects. For the sixteenth irrigation project consultant short lists and proposed direct invitations for consulting services were agreed with the Bank at appraisal, and evaluations of proposals were in progress at the time of negotiations. Because lengthy bid evaluations and GOI procurement control clearances have frequently delayed contracts, during negotiations GOI agreed that the notice of award for the most important start up civil works contract for project construction will have been issued before Loan Effectiveness (para. 8.03). These actions, together with other actions in progress to reduce project implementation delays (para. 1.17) are expected to result in progressive improvement.

Project Formulation

1.21 Sitiung II. The Government is developing the Sitiung (Sungai Dareh) project site in central Sumatra for resettlement of farm families displaced by constructing the Wonogiri Dam on the Solo River in Central Java. Settle- ment took place between 1976 and 1978, with families each receiving 1.0 ha of land to be irrigated when construction of the systems is completed, 0.75 ha of upland, and a 0.25 ha houselot and garden. The Sitiung site lies along the Batang Hari, a river with ample water supplies for irrigation of 20,000 ha. The Bank, under Irrigation IX (Loan 1435-IND), agreed to finance the construction of Stage I, an interim low-lift pump irrigation scheme from this river designed to serve some 3,300 ha which is presently nearing completion. By October 1976 (when Irrigation IX was appraised) studies for a larger gravity system had not progressed beyond prefeasibility level, but analysis by the Bank indicated that the Stage I would be viable on its own. The Bank also agreed under Irrigation IX to support completion of a feasibility study for developing the remaining 16,700 ha of the project area, and contingent on its results, the preparation of detailed designs and tender documents.

1.22 The feasibility study showed that gravity exploitation of water from the Batang Hari would require a large diversion structure which could not be economically justified. The alternative construction scheme comprises two small separate gravity diversions, one on the Batang Siat and one on the Batang Piruko (two tributaries of the Batang Hari) and two independent headrace canals to furnish irrigation supplies to an area of about 10,000 ha. These supplies would be supplemented by occasional pumping from the Stage I pumping plant on the Batang Hari during water shortages (para. 2.06). The -9-

service area would comprise the pump supplied 3,300 ha developed under Stage 1, and about 6,700 ha of newly developed land./l A series of cropping trials carried out in the course of the study, indicated that initial low irrigated rice yields, which were the result of high soil acidity and poor soil fertility, could be improved to acceptable levels within four years. These expectations are consistent with actual experience in the nearby Mimpi Irrigation system, contiguous with the project area and on the same soil types. Proposals for alternative land use, especially rubber, were examined, but GOI and transmigrants strongly prefer irrigated rice to rubber.

1.23 Cisanggarung River Basin Study. The Cisanggarung River borders the Cirebon Irrigation System in West Java, and is one of the larger streams entering the Java Sea near the town of Losari. It is a source for irrigation water during the dry season, but causes floods during the rainy season. Together with other systems in the Cirebon area, run-of-the-river supplied irrigation systems have been rehabilitated under Irrigation Project VI (Loan 1100-IND) and drainage improvements for the Pemali-Comal area, to the east of it, were designed under Irrigation Project VII (Loan 1268-IND). This latter activity led to a feasibility study of drainage and flood control of the coastal Pemali-Comal area including the Padakaton block which is seasonally flooded by the Cisanggarung. The study showed that structural flood control was expensive and not justified. The Cisanggarung River Basin study would continue the search for a technically and economically viable solution which would address not only flood control in the coastal area, but water shortage during the dry season as well.

1.24 Detailed Design of Jatigede Dam. Feasibility studies of the Jatigede Dam on the Cimanuk River in West Java, were carried out in 1973/74 by consultants (NEDECO-SMEC) under Irrigation Project IV (Credit 289-IND). The studies indicated the viability of a 120 m high multi-purpose earth and rockfill dam with ancillary power plant, storing about 1.5 BCM (billion cubic meter), for the irrigation of about 75,000 ha at Rentang and the production of about 800 GWh of power from a final installed capacity of 400 MW./2 Following these studies, the Australian Government financed detailed design of the dam. The Bank, under Irrigation Project VI (Loan 1100-IND), financed the construction of a new barrage, tertiaries and drains at Rentang. In line with GOI's decision in 1976 to defer construction of large dams to the Fourth Five-Year Plan (Repelita IV, 1984-88) activities then focussed on rehabilitation of systems in the service area. During this period (1975-81), rice cropping expanded and production grew with the support of run-of-the- river irrigation, mostly from the Cimanuk and from numerous creeks entering the project area. In 1981, GOI decided to review the Jatigede Dam's

/1 The Batang Piruko and Batang Siat systems could irrigate some 10,900 ha of land. However, it is expected that only 10,000 ha of the service area will be under cultivation and the balance under forest including forest rubber.

/2 A second option included an installed capacity of 400 MW and the irrigation of 115,000 ha; and a third option - the diversion of the Cilutung River into Jatigede's reservoir thereby increasing its power potential to 800 MW. - 10 -

feasibility, and assess changes in the area since 1973./I An interin report by the consultants in November 1981 /2 indicated that there had been considerable increase in rice cropping intensities, and suggested the construction of a lower 100 m high dam (instead of the already designed 120 mi high dam) which would create a storage volume of about 800 MCM, for the full irrigation of about 20,000 ha to 23,000 ha of rice during the dry season and for the generation of firm, peaking energy of 165 GWh/year and of non-firn, secondary energy of 465 GWh/year from an installed capacity of 100 MW. A review of this report indicated that the project's economic rate of return is very sensitive to a correct assessment of the true "without dam" extent of dry season rice growing. Since, however, the water demand of all rice growing areas reported as "already irrigated" exceeds known available supplies at Rentang, it was decided to review the extent of rice cultivation in the dry season, its water supply and demand, and carry out additional reservoir operation studies to optimize benefits from irrigation and power. The result of these studies, scheduled for June 1982 would be reviewed by the Bank and if construction of Jatigede shows good justification, funds allocated for detailed design would be released.

Policy and Institutional Objectives

1.25 The project has been formulated to address an important policy issue - the role of water user associations and a clear definition of responsibility amongst the several government agencies working with such associations for supporting and training them. Although associations have been formed before constructing tertiary networks (para. 1.15) in some cases the formal associations have cut across traditional arrangements between farmers. Increasingly in some parts of Indonesia the traditional groups are being reactivated or expanded instead with good results. Experience, nonetheless, with the massive national tertiary program has pointed to the need to consult farmers and their associations earlier and to a greater extent during the design phase for tertiary networks to ensure that they agree fully with the objectives and operational procedures, and afterwards operate and maintain then properly. Without such consensus, the works constructed have sometimes not been properly used nor maintained. Assurances were obtained during negotiations that this would be done (para. 8 .01e), and for ongoing tertiary design under previous loans, to employ community organizers to assist design consultants.

1.26 The second problem relates to the nultiplicity of official contacts for water user associations. At present the provincial irrigation services, DGFCA extension services, and the local administrations of the Ministry of Home Affairs have sometimes overlapping responsibility for

/1 Financed under Irrigation Project XIII (Loan 1691-IND).

/2 Lower Cimanuk Flood Control Project, West Java: A Review of the Feasibility of Jatigede Dam Project, Interim Report. SMEC. November 1981. - 11 -

training and supporting water user associations. For instance, the farmer groups organized by the extension services for the training and visit system in irrigated areas sometimes do not coincide with water user association membership patterns. As agreed at negotiations, GOI will review the present responsibilities of the different agencies and after consultation with the Bank, will implement any changes needed (para. 8.01f).

1.27 Finally, training for water users and those officials responsible for their support will be carried out under the project. The training objective would be a unified understanding of technical and organizational aspects of tertiary systems operation among the local staff of agricultural extension, irrigation and local government bodies, water user association officials, and key farmers. The training components would include: (a) review and improvement of curriculae and training methods for ditchriders (ulu-ulus) and water users; (b) preparation of training hardware and software (including audiovisual aids); and (c) training of "trainers" (extension agents) in appropriate methods and procedures to train ditchriders and water users. The program would be executed through DGWRD's training centers at Surabaya and Ujung Pandang and DGFCA's training center at Cirebon.

1.28 Institutional objectives under the project are to support the strengthening of DGWRD management, specifically through reviewing management information systems, designing and testing systems for monitoring physical and financial progress of the many subprojects under construction, and streamlining and accelerating the flow of essential information needed for management purposes. Communication links with field projects will be improved, and the processing time of data greatly reduced by using a computer already installed by GOI for DGWRD use. Particular attention will be given to studying which management functions and systems should be common to other Directorate Generals of the Ministry of Public Works and coordinated through the MPW Secretary General's offices.

1.29 During negotiations, GOI and the Bank further discussed the need to improve DGWRD budget procedures and systems. GOI indicated it expected to progressively introduce and improve computer based systems which would clearly identify annual and multiyear budget commitments for projects under construction, proposed new projects, and proposed sources of funding. The GOI informed the Bank it would make available to the Bank for comment the projected five-year DGWRD development budget and work program, and by May 1 of each year, the approved annual budget.

1.30 Other institutional strengthening under the project will consist of expanding the irrigation water data base by installing a wider network of river and rainfall gauges, and improving the analytical capacity of DPMA (para. 3.05). - 12 -

2. PROJECT AREAS

Location

2.01 The Sitiung subproject is located some 150 km east of Padang, West Sumatra, in alluvial plain some 6-10 km wide and about 30 km long bordered by the Batang Hari River on the'north and the Trans-Sumatra highway on the south (Map IBRD-16003R).

Climate

2.02 Climate in the areas is tropical and bi-seasonal. Most annual rainfall of about 2,600 mm occurs between November and May (Annex 5), resulting in floods during the rainy seasons and drought during dry seasons. Temperatures are fairly constant, varying slightly from an average of 260C. Relative humidities are high year round (70%-85%) and mean monthly evapotranspiration rates vary between 122 mm and 300 mm.

Topography, Drainage and Soils

2.03 The river valley in which the Sitiung subproject is located is comprised of flat to gently undulating terraces, composed of deep well drained yellowish-brown clays. It is dissected by numerous creeks, tributaries of the Batang Hari, Piruko and Siat, cutting back from the rivers into which they drain. Dominant soils are a mixture of red-yellow podzolic and alluvial soils, which are short of phosphorus, generally acidic (pH 4.5-5.5), and of low productivity. Year-round flooded paddy cultivation has been shown to raise the pH to 6-6.5 and with applied fertilizers has been shown to improve productivity to satisfactory levels within a number of years.

Population, Farm Sizes and Land Tenure

2.04 Prior to the official transmigration starting in 1976, the Sitiung project area had an indigenous population of about 6,400 families living in margas (traditional communities) which state claims to all land whether cultivated or not, and grant cultivation rights to their members commensurate with the member-s farming capability. In view of low soil productivity and absence of irrigation and fertilizers, marga members practice shifting cultivation where food crops are grown for two or three years in one location and then replaced by rubber trees by which members maintain land claims. Tapping of such low productivity rubber is the main economic activity of indigenous farmers. In contrast, settlers brought in by Government from 1976 have been given 1 ha of land which will now be irrigated, 0.25 ha for a houselot and an additional 0.75 ha of rainfed upland. To compensate the Margas for land relinquished to transmigrants, some of the irrgation scheme will be allocated to indigenous farmers (Chapter 5). - 13 -

Water Supply and Demand

2.05 Water for irrigation of the Sitiung II project area would be diverted from the Batang Piruko and the Batang Siat. Discharges at the two proposed diversion weirs have been obtained by correlation with flows in the Batang Hari where records are available from March 1975. Average monthly discharges at frequencies of 50% and 80% are shown in Table 2.1.

Table 2.1: AVERAGE MONTHLY DISCHARGES FOR THE BATANG HARI, SIAT AND PIRUKO FOR VARIOUS FREQUENCIES

Batang Hari /a Batang Siat /b Batang Piruko /c 50% 80% 507 80% 50% 80% Month frequency frequency frequency frequency frequency frequency ------cu m/sec ------

Jan 270 160 24 17 6 5 Feb 315 220 21 13 5 3 Mar 255 160 27 19 8 6 Apr 410 295 38 27 10 7 May 340 245 22 15 5 3 Jun 195 150 15 A 3 2 Jul 130 115 9 5 2 0.9 Aug 150 110 5 3 0.6 0.3 Sep 170 110 16 8 4 2 Oct 160 90 25 13 6 4 Nov 390 270 18 12 3 2 Dec 215 190 24 14 7 3

/a Catchment area 4,700 sq km at pumping site. lb Catchment area 328 sq km at proposed diversion site. Ic Catchment area 73 sq km at proposed diversion site.

2.06 Some 1,100 ha would be developed under the Sitiung II project, irrigated from the Batang Piruko river, increasing the area already irrigated by pumping from 3,300 ha under Stage I, to 4,400 ha (see Annex 4, Table 2). Demand and supply calculations are based on an overall water use efficiency of 68% and on dependable water supplies from the Batang Piruko (at 80% frequency) conveyed to the Stage I pumping plant on the Batang Hari. Table 2 of Annex 4 lists demands for a 1:5 dry year and shows incremental pumping required from the Batang Hari to meet water deficiencies in the Batang Piruko during that year for two rice crops: a wet season crop grown during SeptemberJanuary on 4,400 ha and a dry season rice crop grown during February-July on 3,520 ha (80% of the service area). Annex 4, Table 3 gives irrigation requirements of 6,700 ha to be irrigated using dependable supplies - 14 -

from the Batang Siat for the same cropping pattern given above. The balance of demand and supply is shown for Station BSD 30A on the main canal where the water diverted and conveyed from the Batang Siat joins the main system. As may be seen, supply exceeds demand except for the last third of September and the first third of October in a 1:5 dry year. This small shortage would be made up by pumped supply from the Batang Hari.

Existing Works

2.07 Sitiung II. Work is well advanced on constructing the Stage I system including a 5 cu m/sec pumping plant on the Batang Hari, and main, secondary and tertiary canals to serve an area of about 3,300 ha. Works at the pumping plant have been completed, and test pumping started in October 1981.

3. THE PROJECT

Project Description

3.01 The proposed project will comprise: (a) construction of Stage II of a Bank supported irrigation development at Sitiung, West Sumatra, to serve about 7,600 ha which would also substitute gravity supplies for water provided by a temporary pumping station for some 3,300 ha developed under Stage I; (b) a river basin study for irrigation/drainage development at Cisanggarung; (c) detailed design of the Jatigede Dam; (d) strengthening of DGWRD's management information systems; (e) assisting the Institute of Hydraulic Engineering (DPMA) to extend its hydrologic data network and data processing; (f) expanding training programs for water users; and (g) assisting DGWRD executing agencies and East Java's Provincial Irrigation Service to upgrade financial control and auditing procedures.

Project Works

3.02 Sitiung Stage II will comprise construction of diversion systems on the Batang Piruko and on the Batang Siat, ancillary conveyance and distribution networks to serve about 7,600 ha of which 6,700 ha will be developed into rice fields (Map 1600 3R). The Batang Piruko system will comprise:

(a) a 10 km long access road to the diversion site;

(b) a masonry diversion weir and a concrete stilling basin;

(c) a 17.5 km headrace conveyance canal for 7.5 cu m/sec (from diversion to system headworks near the pumping plant built under Stage 1) and related structures;

(d) canal structures and inter-farm networks for about 1,100 ha; and

(e) land clearing by contractors of about 420 ha and rice field levelling and bunding by farmers on about 770 ha. - 15 -

The Batang Siat system will comprise:

(a) a 3 km long access road to the diversion site;

(b) a masonry diversion weir, a concrete stilling basin and an earth closure embankment;

(c) a 24.5 km long headrace conveyance canal for 11.5 cu m/sec and structures between the diversion weir and the Batang Siat main canal;

(d) main, secondary canals, river crossing and canal structures north and south of the Batang Siat to serve a total area of about 6,500 ha;

(e) design and construction of inter-farm irrigation networks (tertiaries, quaternaries and drains) to serve the same 6,500 ha;

(f) land c:Learingby contract of about 1,400 ha and rice field clearing, levelling and bundling by farmers of about 5,320 ha; and

3.03 Some 24 m/m of internationally recruited consulting services for construction supervision of both the Batang Piruko and Batang Siat systems will be provided.

3.04 In the combined service areas forming the Sitiung Stage II subproject (7,600 ha) rice fields will cover 6,700 ha of which about 1,820 ha have been previously cleared (at Batang Siat) by GOI for transmigrants and about 610 ha has been cleared by indigenous farmers. The remainder (about 4,290 ha) will be cleared by farmers (about 2,470 ha) and by GOI (about 1,820 ha) as summarized in Table 3.1. Present land use is summarized in Table 5.2.

Table 3.1: LAND CLEARING AT SITIUNG II (ha)

Already Total Expected Already cleared service rice field cleared by local Land to be cleared area area by GOI inhabitants Total GOI Farmers

B. Piruko 1,100 1,000 - 230 770 420 350/a B. Siat 6,500 5,700 1,800 380 3,520 1,400 2,1007b

Total 7,600 6,700 1,800 610 4,290 1,820 2,470

/a All of which in various stages of clearing and used for intermittent growing of rainfed upland food crops.

/b Of which 1,620 in various stages of clearing and used for intermittent growing of rainfed upland food crops. - 16 -

3.05 Designs and Studies. The project will include about 226 m/m of internationalyrecruited consulting services and about 262 m/m of local engineeringconsultant services for preparationof future developmentsfor:

.CisanggarungRiver Basin (West and Central Java)

(a) a master plan for developmentof the 1,800 sq km Cisanggarung River Basin, including the Padakaton Drainage Block and the Malahayu Reservoir;

Jatigede Dam (CentralJava)

(b) detailed design of the Jatigede dam, appurtenantfacilities and power plant in accordancewith the findings of an updated feasibilitystudy, which is presently being completed.

3.06 InstitutionalSupport. This componentwould include the following:

Strengtheningof DGWRD's Management InformationSystems.

(a) about 400 m/m of local consulting services, for improving management informationsystems throughoutDGWRD, including the progressive introductionof computer based systems;/l

(b) developing software applications;

(d) staff training;and

(e) supervisingoperations and maintainingequipment.

Collection,Processing and Evaluation of HydrologicData

(a) constructionof about 90 automaticwater level recorder stations;/2about 30 automatic rainfall recordingstations; and about 40 climatologicalstations supplementingexisting networks in various parts of Indonesia;

/1 The systems would be compatiblewith those in use by the Ministry of Public Works in Jakarta and provincial offices.

/2 About 17 in Sumatra, 15 in Kalimantan,14 in Sulawesi,5 in Lombok, 9 in Sumbawa, 6 in Flores, 6 in Sumba, 15 in Timor and 3 in Irian Jaya. - 17 -

(b) about 108 m/m of internationallyrecruited consulting services to assist DPMA /1 in conducting studies (such as flood frequencies,and rainfall-runoffrelationships) analyze hydrologic data and publish hydrologicyearbooks; and

Water Users Training

(a) constructionand equipment for about 1,200 sq m of classroomsand quarters for training centers at Surabaya,Cirebon and Ujung Pandang, and about 3,400 sq m of classroomsat nine satellite training centers; and

(b) the preparationof teachingaids and material to train instructorsin operationof inter-farmsystems and their maintenance;review and upgrading of instructionmethodologies, curricula and aids; selectionand preparationof irrigation demonstrationsystems; assistanceand supervisionof counterpart staff in selectingand training instructors;and assistanceand supervisionof instructorsin demonstrationsand training ulu-ulus and key farmers, supportedby about 120 m/m of internationally recruitedconsulting services (Annex 5).

Upgrading of Financial Control and Auditing Procedures

About 20 m/m of local and internationallyrecruited consulting services would be financed under the project for the improvement of financialcontrol and auditing procedures for all DGWRD agencies implementingprojects with the Bank's financialassistance.

Status of Preparation

3.07 Sitiung II. Detailed design and preparationof tender documents has been completedfor irrigationsystems serving 7,600 ha. Design of the two headrace canals of the Batang Piruko and Batang Siat systems are substantiallycompleted and should be finalizedby April 1982. Investigations and design of the two headworks are expected to be completedby June 1982.

3.08 Designs and Studies. Terms of Reference for the CisanggarungBasin SWFpy were prepared in June 1981 and GOI intends to appoint SMEC /2 as consultant for this study, as well as for the detailed design of Jatigede Dam which this firm has been studying since 1973.

/1 DGWRD's Directorateof Hydraulic Engineeringlocated at Bandung.

/W Snowy MountainsEngineering Company, Australia. - 18 -

ImplementationSchedule

3.09 The proposed implementationschedule (Figure 3.1) for Sitiung II reflects the status of design work, GOI commitment to carry out the works in 1982/84, and good experience in the constructionof first stage works. Major contracts for the constructionof headrace canals are expected to start in the Fall of 1982, constructionof headworks in January 1983. Land clearing will be completed by contractorswithin three years, while farmers will clear and develop (level and bund) the remaining lands for rice cropping as water is delivered.

Consulting Services

3.10 DGWRD will continue to rely heavily on consultantsfor project preparationand assistance in constructionsupervision. This is in line with GOI's policy of limiting staff increases and encouragingthe use and expansion of local consultingservices. Under the project, over 50% of professional inputs for design and 100% of technical services for the management informationsystems will be furnishedby local consultants. Internationally recruited consultantswill be provided only for specializedtraining and assisting PROSIDA staff and for the Cisanggarungstudies, Jatigede design and constructionsupervision of complex structures for which local expertise is not yet available. Estimated schedules for consultants'assignments and cost breakdownsare summarized in Table 3.2 and detailed in Annex 1, Tables 7 and 8.

3.11 Sitiung II. Foreign consultantswere engaged by GOI in association with local consultantsto supervise construction-ofStage I. The same consultants (Sir M. MacDonald and Partners, UK) have been engaged to design Stage II and will also assist PIBD in supervising construction of main works and structures for Stage II. Additionally,local consultantswill assist PIBD in designing and supervising construction of tertiaries. The cost of local services (on a per ha basis) is included in construction costs (Annex 1, Table 2).

3.12 Design and Studies for Future Projects and Institution Strengthening. Foreign consultants with the participation of local firms will prepare master plan studies of the Cisanggarung River Basin and subject to the results of an update of earlier feasibility studies of Jatigede Dam the detailed design of Jatigede Dam. Foreign consultants would assist PROSIDA in upgrading and expanding the training of water users, irrigation service staff and agricultural extension agents, and DGWRDin improving collection and processing of hydrologic data. Local consultants would assist DGWRDin upgrading its management information systems and in improving financial control and auditing procedures. - 19 -

Table 3.2: CONSULTING SERVICES

Manpower Base cost Local Local Local engi- Local Expa- engi- techni- Expa- neers techni- triate neers cians Total triate m/m cians ------($ million) ------

Construction Package Sitiung II 24/a - - 0.30 0.27/b - 0.57

Designs & Studies Cisanggarung Basin Study 117 102 135 1.46 0.25 0.14 1.85 Jatigede Dam - Det. Design 109 160 320 1.36 0.40 0.32 2.08

Institution Support DGWRD management information systems - 400 - - 1.0 - 1.00 Hydrologic data improvement 108 - - 1.35 - - 1.35 Water users training 120 - - 1.50 - - 1.50 Auditing improvement 8 12 - 0.10 0.03 - 0.13

TOTAL 486 674 455 6.07 1.95 0.46 8.48

/a For construction supervision. All other consulting services have been provided under Irrig. Proj. IX (Loan 1435-IND).

/b Local consultants for tertiary design and construction supervision costed on a per ha basis. - 20 -

Cost Estimates

3.13 The estimated total project cost is $76.6 million, including physical contingencies,expected price increases,and administrationand taxes on civil works (Table 3.3). The foreign currency component is estimatedat $34.5 million or about 45%. Costs are expressed in end 1981 prices and are derived from adjusted costs of ongoing works and for Sitiung II on updated bills of quantitiesand unit costs derived from Stage I work now nearing completion. Estimatedmonthly base costs of local and foreign consultantsare $2,500 and $12,500 respectivelyfor engineers and $1,000 for techniciansand draftsmen. Equipment costs are based on imports except for vehicles where tax free costs of locally assembledvehicles have been used. Physical contingenciesof 15% have been added to all works and services except Sitiung where 20% has been added. Estimatedprice increases have been calculatedon the basis of projectedinflation rates: for local costs, 14% in 1982, 12% in 1983 and 10% thereafter;for foreign costs 8.5% in 1982 7.5% in 1983 to 1985 and 6% thereafter. Project costs are detailed in Annex 1, Tables 1, 5, 6 and 7.

Financing

3.14 The proposed Bank loan of $37 million would finance about 50% of the estimated total project cost, exclusive of taxes ($2.3 million) and reserve procurement($0.1 million). The remaining $39.6 million (Rp 24.8 billion) would be provided by GOI annual budget appropriation.

Procurement

3.15 Civil Works. Because of the remote location of the site and the satisfactoryperformance of seven contractorspresently completingStage I works (financedunder Loan 1435-IND), it will be cost effective to procure works by nationally advertisedcompetitive bidding. Works have been grouped in 11 packages comprisingheadworks, headrace canals of Batang Piruko and Batang Siat; main and secondary canals as shown in Table 3.4. In addition there would be a number of small contracts for tertiary construction,which would also be procured by competitivebidding advertised locally. All works will be tendered on the basis of standard contract documents agreed with the Bank in September1980, and procured in accordancewith GOI procurement procedures satisfactoryto the Bank. All multiyear contractswill include appropriateescalation clauses. - 21 -

Table 3.3: PROJECT COST SUMMARY (END-1981 PRICES)

Currency Local Foreign Total ------($ million) ------

Construction - Sitiung II Land acquisition 0.07 - 0.07 Construction 15.08 13.50 28.58 Consultants 0.28 0.29 0.57 Administration 2.19 - 2.19 Taxes on civil works 2.16 - 2.16

Design and Studies Consultants 1.42 2.51 3.93 Equipment 0.02 0.35 0.37 Contract services (drilling and surveys) 0.22 0.77 0.99 Administration 0.26 - 0.26

Institutional Support Civil works 1.52 1.27 2.79 Training 2.75 0.18 2.93 Consultants 1.57 2.41 3.98 Equipment and programs 0.02 3.58 3.60 Administration and support 0.91 0.05 0.96 Taxes on civil works 0.14 - 0.14

Total Base Cost 28.61 24.91 53.52

Physical Contingencies Construction package 3.53 2.76 6.29 Design and studies 0.29 0.54 0.83 Institutional support 1.02 1.12 2.14

Expected Price Increases Construction package 5.30 2.39 7.69 Design and studies 0.59 0.74 1.33 Institutional support 2.80 2.00 4.80

Total Project Cost 42.14 34.46 76.60 - 22 -

Table 3.4: SITIUNG II CONTRACT PACKAGES

Estimated Estimated date of contract total cost Description of contract signature ($'000, rounded)

Batang Piruko BP 1 Readworks Jan. 1983 1,100 BP 2 Headrace canal West July 1982 1,990 BP 3 Headrace canal East July 1982 2,255

Batang Siat BS1 Headworks Jan. 1983 2,100 BS2 Headrace canal East Oct. 1982 2,600 BS3 Headrace canal West (1) Oct. 1982 2,960 BS4 Headrace canal West (2) Jan. 1983 2,970

Irrigation Systems (main canals and secondaries) BS5 BSD29-33 July 1982 1,250 BS6 BSD33-46 July 1982 2,575 BS7 BS1-7 June 1983 2,940 BS8 BS7-end June 1984 3,740 - 23 -

3.16 Equipment and Materials. An estimated $4.0 million of equipment will be purchasedas detailed in Annex 1, Table 6 and summarizedin Table 3.5:

Table 3.5: SUMMARY OF EQUIPMENT

$ million

Hydrologic and climatologicequipment 1.20 Teaching and audio visual equipment 0.40 Communicationequipment 0.79 Computer hardware 1.10 Office equipment 0.03 Surveyingequipment 0.05 Vehicles /a 0.39

Total 3.96

/a Comprising5 vehicles and 8 mobile training units required for start up and to be procured under consulting contracts. Eight other vehicles and 20 motorcycleswill be procured by GOI locally and hence are consideredreserve procurement.

Hydrologic,climatologic and communicationequipment (about $2.0 million) would be procured under ICB. Local manufacturerswould be granted a prefer- ence of 15% of the c.i.f. price of imported goods, or the customs duty, whichever is lower. The remainingequipment could not convenientlybe grouped into sufficientlylarge packages to attract internationalbidders, and would be procured locally through GOI procurementprocedures acceptableto the Bank.

3.17 Review of Procurement. Civil works and equipmentwill be procured by the relevant DGWRD implementingagency. An independentbut internal control of all procurementis made by the DGWRD Secretariat,and larger contracts ($800,000and above) must also be cleared by the external State SecretariatProcurement Control Unit (SEKNEG). These procurementcontrols appear to be working efficiently. The Bank has delegated its supervision responsibilityto RSI, which works closelywith DGWRD and the State Secretariaton procurementmatters. For civil works, the Bank will review prior to tenderingand award, nine contracts each of whose estimatedcost is equivalent to $1.5 million or above, in aggregate covering about 75% of the value of civil works. Equipment contractsfor about $2 million (about 50% of the total value of equipment furnishedunder this project) procured through ICB will be reviewed by the Bank prior to tendering and award. The remainingcontracts will be reviewed by the Bank on a post award sample basis. - 24 -

Disbursements

3.18 Loan disbursements will be made against full documentation as follows:

(a) 30% of total expenditures for civil works for the construction of headworks and main irrigation systems of Sitiung II;

(b) 50% of total expenditures for civil works for DGWRD's management information systems and of extension of DPMA's hydrologic network;

(c) 100% of foreign expenditures for directly imported equipment and 100% of local expenditures (ex-factory prices) for locally manufactured equipment and 65% of locally procured, off-the- shelf items; and

(d) 100% of consultants costs.

3.19 Disbursements will be effected against quarterly statements of expenditure at 100% of total expenditures for water user training, including facilities, training materials, per diems and lecturer honorariums; and at 30% for tertiary networks at Sitiung II (Annex 6).

3.20 GOI will fund the remainder of project costs. The schedule of disbursements (Annex 1, Table 4) has been projected with the following assumptions:

(a) implementation will proceed as set out in schedule, but may be delayed by up to 12 months; and

(b) disbursements may be delayed by up to 12 months behind the projected implementation schedule.

Disbursements during the second, third and fourth years are expected to be somewhat faster than indicated by the regional profile as they reflect the advanced stage of preparation of the project, land acquisition for the Sitiung II construction has started already and no problems are foreseen, and the improving disbursement trends for previous loans (para. 1.20).

Accounts and Audits

3.21 The Bank has assisted PROSIDA and PIBD in establishing accounting systems, and these, like the Project Cimanuk, follow government procedures. Final accounts including balance sheets and consolidated receipts and expenditures statements are prepared at the year end to satisfy Bank requirements. Each accounting section is headed by a certified public -25 -

accountantwho reports monthly on budget and financialstatus. Internal audit sections are responsiblefor visiting project sites quarterlyand examining local accountingrecords.

3.22 PROSIDA, PIBD and Project Cimanuk accounts are subject to audit by the State Auditor (DirectorateGeneral of State FinancialControl) which is now using private auditors to clear a backlog of work. The state auditors' short-formreports have so far analyzed income and costs, and checked that the costs have been properlyincurred accordingto budget allocations. No long-formreports are prepared.

3.23 Although the accounting and auditing systems have provided reasonablefinancial control for Bank supportedprojects, improvements are desirable in timeliness 6f annual accounts and audits; and in systems of internal control, especiallyfor the reconciliationof assets with cumulative expendituresand proceduresfor writing off assets. In addition, the State Auditor should prepare long form reports following specific guidelinesfor each agency to be reviewed with the Bank.

3.24 Consultantaccountants will be employed to advise GOI on measures to be taken in line with these recommendationsand to review accountingand financialcontrol systems for all DGWRD agencies implementingBank supported projects. Assuranceswere obtained at negotiationsthat these agencies will maintain separate accounts for each subproject;engage auditors acceptableto the Bank to audit these accounts; and submit to the Bank, within nine months of the close of each fiscal year, audited statements,together with the auditors comments (para. 8.01c).

EnvironmentalImpact

3.25 Irrigationdevelopment at Sitiung is the second phase of ongoing agriculturaldevelopment in the area involvingland clearing and conversionto rice paddies from scrub and secondaryforest sometimesinterspersed by rubber trees. Displaced fauna will relocate to adjacent forested upland areas which are extensiveand likely to remain in their natural state for many years to come. Intensivedevelopment of the 6,700 ha will have a minor effect on flora when balanced against the vast natural forests surroundingthe site. The use of water from two small tributariesof the Batang Hari will have an equally small effect on river hydrology or fauna in one of Sumatra's largest river systems. - 26 -

4. ORGANIZATION AND MANAGEMENT

4.01 Sitiung II. The implementation of irrigation systems for Stage II would be managed by PIBD's subproject manager and staff, assisted by foreign and local consultants, following the completion of Stage I works scheduled for the end of 1981. Land clearing will be the responsibility of the Directorate of Highways (DGH), and levelling and bunding by farmers will be supervised by DGFCA (para. 8.01g).

4.02 Studies, Designs and Water User Training. Cisanggarung Basin Studies would be carried out by consultants, and managed and supervised by Project Cimanuk of DGWRD's Directorate of Rivers, which would also supervise detailed design of Jatigede Dam. Training of water users would be implemented by PROSIDA, using DGWRD's training units at Surabaya and Ujung Pandang, and DGFCA's training unit at Cirebon. Lecturers will be drawn from DGWRD, DGFCA and Ministry of Home Affairs staff (Figure 4.3).

Operation and Maintenance

4.03 Sitiung II. Operation and maintenance of headworks, main and secondary systems of the Sitiung irrigation development will be managed by PIBD's O&M unit for two years following construction. Following this, the provincial irrigation service will take over the system for routine O&M. Tertiary systems will be operated and maintained by water users in each tertiary block, who will receive instruction and guidance from the agricultural extension service. Assurances were obtained at negotiations that GOI will allocate sufficient annual O&M funds and staff to operate and maintain the main and secondary systems satisfactorily (para. 8.04).

Monitoring and Evaluation

4.04 Sitiung II. PIBD will monitor the operation and maintenance of physical components of the completed system during a period of at least two years following completion of Stage II. This will include pumping from the Batang Hari, gravity diversions at headworks and water delivered to secondary and tertiary blocks. DGFCA will monitor seasonally cropped areas and production for at least five years after system completion. Organization and evaluation of the monitoring activities will be the responsibility of the Evaluation Section, Directorate of Planning and Programming, which is being strengthened with Bank assistance (Cr. 995-IND). - 27 -

5. AGRICULTURAL PRODUCTION

Crop Production Changes

5.01 After the Sitiung II irrigation system is operational, farmers will shift from present upland cropping of secondary food crops and rainfed rice to irrigated rice. Changes in cropping patterns, cropping intensities, yields and production are discussed below and summarized in Table 5.1 and in Annex 2.

5.02 Indigenous farmers in the Sitiung area are growing an annual rainfed rice or secondary food crop under shifting cultivation. Typically after two or three years cropping of each site, farmers plant forest rubber. In addition farmers have developed lowland rice fields (sawah) on small local areas adjacent to streams, sometimes using simple irrigation for a single annual crop. Currently there are some 80 ha of sawah in the Sitiung I area (3,300 ha) and some 230 ha in the 1,100 ha area to be newly supplied from the Batang Piruko. In the area of 6,500 ha to be supplied from the Batang Siat there is about 380 ha of sawah (Table 5.2). Indigenous farmers typically depend on daily tapping of forest rubber, but rely on their sawah for meeting family rice needs. Paddy yields are about 2.0 tons/ha, without fertilizer.

5.03 About 1,800 transmigrant farmers, all experienced irrigated rice growers from Central Java (para. 1.21), have been settled in the Sitiung II area since 1976. Each family has been given 1 ha of uplands capable of irrigation, which has been cleared by GOI, a 0.25 ha houselot and an additional area of 0.75 ha of uplands for future use outside the irrigation area. Until irrigation becomes available the settlers are growing rainfed food crops, especially upland rice, groundnut, maize and cassava. Present yields are low (rice, 0.3 tons/ha; groundnut, 0.2 tons/ha; maize, 0.4 tons/ha; and cassava, 2 tons/ha) because of poor soil fertility, exaggerated by extensive removal of top soil during fully mechanized forest clearing.

5.04 Because of the present low yields, particular attention has been paid to projecting likely production under irrigation from these soils. Irrigation was introduced in the 1940s when the Mimpi irrigation system was constructed to serve about 800 ha of similar land contiguous to the Sitiung scheme. Unfortunately, there are no records of crop performance in early years. Crop cutting trials over the last 5 years show average yields of 3.5 ton/ha of HYVs with proper fertilizers, and 3.0 tons for unfertilized long duration local varieties./1 Random cutting trials, in May 1981 gave yields ranging from 5 tons/ha to 10 tons/ha, in all cases on the most recently developed land and for the 9th crop planted since sawahs were formed./2 Within the Mimpi command area a 14 ha seed station operated by the Provincial

/1 "Review of Yield Projections", Batwell, March 1981 (Sir W. Halcrow and Partners).

/2 "Agricultural Presentation", Batwell, May 1981 (Sir W. Halcrow and Partners). Table 5.1: CROPPING PATTERN, YIELDS AND PRODUCTION - SITIUNG II (6,700 ha)

Present Future without project Future with project Area Yield Production Area Yield Production Area Yield Production ('000 tons) ('000 ha) (tons/ha) ('000 tons). ('000 ha) (tons/ha) ('000 tons) ('000 ha) (tons/ha)

Batang Piruko (1,000 ha) 0.26 - - - Upland Crops 0.35 - 0.26 0.35 - - - - Upland rice 0.16 0.3 0.05 0.16 0.3 0.05 - Groundnut 0.05 0.2 0.01 0.05 0.2 0.01 - 0.02 - - Maize 0.05 0.4 0.02 0.05 0.4 - Cassava 0.09 2.0 0.18 0.09 2.0 0.18 -

Sawah 0.46 3.5 1.61 Existing sawah 0.23 2.0 0.46 0.23 2.0 0.46 - 1.39 3.0 4.17 1 New sawah - - - - -

- - - - Mixed forest 0.42 - - 0.42 -

- 1.85 Total 1.00 - - 1.00 - 185% Cropping intensity (%) 100% 100%

Batang Siat (5,700 ha) - 2.48 - - Upland Crops 3.42 - 2.48 3.42 - Upland rice 1.54 0.3 0.46 1.54 0.3 0.46 - Groundnut 0.51 0.2 1.10 0.51 0.2 1.10 - - Maize 0.51 0.4 0.20 0.51 0.4 0.20 - - Cassava 0.86 2.0 1.72 0.86 2.0 1.72 -

Sawah 3.5 2.66 sawah 0.38 2.0 0.76 0.38 2.0 0.76 0.76 Existing 9.58 3.0 28.77 New sawah - -

- - - Mixed forest 1.90 - - 1.90 -

3.24 10.34 Total 5.70 - 3.24 5.70 - 181% Cropping intensity (%) 100% 100% - 29 -

Agriculturalservices was developed four years ago. Average paddy yields of 3.0-3.5 ton/ha of HYVs are obtainedwith fertilizerapplications of 150 kg urea and 90 kg TSP.

5.05 Since 1978, consultantsengaged in the Sitiung II feasibility studies carried out a series of crop trials on three sites in the project area and in farmers'fields alongside,all irrigatedby pumped supplies. Despite occasional pump break downs, trials do provide useful evidence for yield projectionson newly irrigatedland. The Piruko site has probably the worst soil conditions since it was mechanicallycleared and more top soil removed. It is close to the Sitiung I transmigrationvillage on fairly sloping land. Results for HYVs with 200 kg/ha urea and 100 kg/ha TSP at the Piruko Site are:

Year 1 1st crop ...... 2.0 tons/ha 2nd crop ...... 1.5 tons/ha Year 2 3rd crop ...... 0.5 tons/ha (seriouslyaffected by pests) 4th crop ...... 2.2 tons/ha Year 3 5th crop ...... 2.5 tons/ha

5.06 The most importantconstraint for rice production is the poor initial soil fertility,especially the low ph and low phosphate status. Measurementsin the Sitiung I area show that upon ponding of water a ph of 4.5 rises to about 5.0 and after a year or two, to around 6.0. During this process, increasingamounts of humus are puddled into rice fields and further assist nutrient holding capacity. Early rice yields are likely to be depressed by the effects of low phosphateuptake and high iron/aluminum/ manganese levels., As the ph rises however, these effects will become much less pronounced.

5.07 Following field visits and review of availabledata, conservative yield estimateshave been adopted. Different yield progressionsmay be expected for the Batang Piruko area compared to the Batang Siat area where mechanical clearingwas restructedand where less top soil was removed. Paddy yield projectionsare as follows:

Year Batang Piruko Batang Siat ------tons/ha/crop ------

1 1.2 1.5 2 1.5 1.8 3 2.3 2.5 4 2.8 2.8 5 3.0 3.0 - 30 -

5.08 Extension service personnelare in place in each transmigrant village, as are BRI credit branches and input suppliers.

5.09 Land clearing by GOI contractorsis in progress and rice field formationby farmers is scheduled to start when water becomes available. Farmers have been organized into groups, and credit is available for their use in sawah formation. One tertiary block will be levelled and funded by contract as a demonstrationfor farmers in the Stage I area. A similar approach will be adopted in the Batang Siat area. The earliest irrigationbenefits are expected from existing sawah, followedby the transmigrantlands which were cleared already. Indigenousfarmers are expected to more slowly develop their existing upland fields into sawah, togetherwith land being cleared for them by GOI as compensationfor land released to transmigrants. There is at present about 240 ha of scrub (belukar)and 210 ha of secondaryforest within the service area of the Batang Piruko system, and 910 ha of scrub, 850 ha of mixed primary and secondary forest, and 370 ha of "forest rubber" in the Batang Siat service areas (Table 5.2). The forest land in the Batang Piruko area will be cleared by GOI through contracts using chain saws and hand labor. In the Batang Siat area it is estimated that all the scrub and secondary forest will be cleared by GOI contracts,together with about half the mixed primary/secondaryforest. Indigenousfarmers may further develop the remaining 350 ha of mixed primary/ secondaryforest at some time in the future. They are, however, unlikely to clear the 370 ha of "forest rubber" in the near term. Accordingly,it is assumed in the economic analysis that 800 ha of the 6,500 ha Batang Siat service area and 100 ha of 1,100 ha Batang Piruko servicearea will remain undeveloped. - 31 -

Table 5.2: SITIUNG II: LAND USE (ha)

Batang Piruko Batang Siat (1,100 ha service area) (6,500 ha service area) Irrigated Irrigated sawah sawah Preproject at full Preproject at full land use development land use development

Transmigrant Lands Land mechanically cleared by GOI and presently used for upland crops or fallow - - 1,800/a 1,800/a

Indigenous Farmer Lands Existing sawah 230 230 380 380 Upland fields 350 350 1,620 1,620 Alang alang 70 70/b 570 500 Scrub (belukar) 240 240/b 910 900/c Mixed primary/secondary forest - 700 350/c Secondary forest 40 40/b 150 150/c Secondary forest including rubber trees 170 70/b 370 -

Total 1,100 1,000 6,500 5,700

/a Cleared by GOI in 1977-1979 period.

/b To be cleared by GOI contracts as compensation for land given up to transmigrants.

/c 1,400 ha to be cleared GOI contracts as compensation for land given up for transmigrants.

5.10 Cropping intensities will increase as land is cleared and formed into sawahs. Farmers, especially the Wonogiri transmigrants, are anxious to plant irrigated rice and cropping intensities of 180% to 185% are expected within 10 years with a yield of about 3.0 tons/ha per crop (para. 5.07 and (Table 5.3 and para.5.07). - 32 -

Table 5.3: SITIUNG II: CROPPINGINTENSITIES

Batang Piruko Batang Siat (1,100 ha service area: (6,500 ha service area: 1,000 ha cropped area) 5,700 ha cropped area) % harvested % harvested % of service of irri- % of service of irri- area gated rice area gated rice Year harvested land harvested land

1 30 100 15 90 2 115 165 40 130 3 140 170 65 140 4 155 175 100 150 5 170 185 120 160 6 180 185 140 170 7 180 185 160 180 8 180 185 160 180 9 180 185 160 180 10 180 185 160 180

Drying Storage and Processing

5.11 Both transmigrant and indigenous farmers in the project area are experienced paddy growers. They sun-dry paddy on mats, and store dry paddy in their houses. Small mills with good storage and drying floors are being introduced progressively in transmigrant villages, where BUUD/KUDsare well established. Indigenous villages are served already by small private mills, which may be expected to expand as production grows. - 33 -

6. MARKET PROSPECTS,PRICES, FARM INCOMES AND PROJECT CHARGES

Market Prospects

6.01 Indonesiahas been the largest rice importer in the world in the last decade with imports ranging annually between 0.5 and 2.3 million tons. Based on projected future production and demand the estimated rice deficit will range between 2 and 3 million tons in 1990./1 There is likely to be keen demand to increasingnational rice output, which would substitute present imports. Market prospects in the Sitiung area are especially good, since the region is a rice deficit area and rice demand is growing rapidly through nearby extensive land settlement and nucleus estate operations based on tree crops.

6.02 The rice marketing system is well establishedand provides for producer price support and consumer protection through interventionof BULOG, the national food procurementagency. It procures 2-5% of national rice output mostly via cooperatives(BUUD/KUD), and imports the equivalent of about 10%. BULOG's support prices for rice and other food crops are usually somewhat below average farmgate prices and it only buys when prices are depressed.

Prices

6.03 Both farm inputs and outputs have been valued in terms of end 1981 currency values for farm budgets and economic analysis. Economic prices for rice, soybeans, corn, groundnuts and fertilizerswere based on world market price forecasts produced by the Bank-s CommodityDivision, adjusted for transportation,processing and handling costs to the -farmgatelevel as shown in Table 6.1. The remaining inputs not traded on the international market have been expressed in terms of actual (farmgate)prices. The economic price of farm labor has been valued at half of the actual price as its shadow price (para. 7.03). All prices in the analysis are summarized in Table 6.2. Rice produced under the project would substitute for Indonesian imports of 25% broken quality rice. It has been shown that the world market price for this quality of rice is about 90% of the standard 5% broken Thai white rice price. Indonesia is now self-sufficientin corn and groundnuts, and the economic prices have been calculated on the basis of export prices.

/1 Indonesia: Supply Prospects for Major Food Crops," Bank Report No. 2374-IND,March 1979. - 34 -

Table 6.1: PRICE STRUCTURE FOR FOODCROPS AND FERTILIZERS (At end-1981 constant US dollars/ton)

Foodcrop and fertilizer prices /a End-1981 1985 1990

Rice/Paddy Export price, Thai, 5% broken f.o.b. Bangkok 530 618 638 Indonesian import prices /b 477 556 574 Ocean freight and insurance +25 +25 +25 Port handling and storage +10 +10 +10 Transport to wholesalers /c +12 +12 +12 Handling, transport mill to wholesaler /d -7 -7 -7 Rice, ex-mill, project area 517 596 614 Paddy equivalent Ie 326 375 387 Milling costs less value of byproducts -6 -6 -6 Transport and losses, farm to mill -13 -13 -13 Farm-gate paddy price 306 356 368 (Financial farm-gate price) (168) (195) (202) Corn (maize) Export price, f.o.b. US gulf ports 158 221 226 Export price, f.o.b. Indonesia ports /f 173 236 241 Port handling in Indonesia -10 -10 -10 Transport, wholesalers to wharf -12 -12 -12 Transport, farm to wholesalers -8 -8 -8 Farm-gate price 143 206 211 (Financial farm-gate price) (160) (190) (219) Groundnut World price, f.o.b. Nigeria /h 646 724 786 Export price, f.o.b., Indonesia ports If 661 704 766 Port handling in Indonesia -10 -10 -10 Transport wholesaler to wharf -15 -12 -12 Transport, farm to wholesalers -10 -8 -8 Farm-gate price 626 674 736 (Financial farm-gate price) (640) (688) (754) Urea World export price, f.o.b. Europe 239 297 312 Ex-factory price, Palembang /i 254 312 327 Handling and distribution to retail level +35 +35 +35 Transport to farm +4 +4 +4 Farm-gate price 293 351 366 (Financial farm-gate price) (112) (128) (144) Triple Super Phosphate (TSP) World export price, f.o.b. Florida 208 251 254 Orean freight and insurance +56 +56 +56 Handling and distribution to retail level +35 +35 +35 Transport to farm +4 +4 +4 Farm-gate price 303 346 349 (Financial farm-gate price) (112) (128) (144)

/a All world prices are based on Bank projections with adjustment to end-1981 constant dollars. /b 90% of export price, Thai, 5% broker, f.o.b. Bangkok. 7F Weighted average of transportation costs to the wholesalers in the different project areas. /d Based on an average distance of 50 km from the production area to the wholesalers. /e Based on a 63% rice recovery ratio. 7f Assuming Indonesia a net exporter of corn and groundnuts; the export price (f.o.b. Indonesia) is estimated at world market price plus a US$15 transport premium for Asia markets. /g Equal to standard price projections, c.i.f. Rotterdam, minus $20/ton insurance and freight from Gulf port to Rotterdam. /h Equal to standard price projections, c.i.f. Europe, minus $30/ton insurance and freight from Nigeria to Europe. /i Urea is valued at ex-PUSRI factory, Palembang; IBRD world market price pro- ections for bagged urea, f.o.b. Europe have been adjusted for Southeast Asia markets with a US$15 transport premium. - 35 -

Table 6.2: INPUT AND OUTPUT PRICE SUMMARY

end-1981 mid-1990 Financial Economic Financial Economic

Crops (Rp/kg) Paddy 105 191 126 230 Corn 100 89 137 131 Groundnut 400 391 471 460

Seeds (Rp/kg)/a Rice 210 191 250 230 Corn 150 89 220 131 Groundnut 450 391 525 460

Fertilizer (Rp/kg) Urea 70 183 90 229 TSP 70 189 90 218

Other Inputs Zinc phosphide (Rp/kg) 2,300 4,200 2,300 4,200 Agrochemicals (Rp/kg) 1,250 6,500 1,250 6,500 Animal labor (Rp/day) 1,500 1,500 1,500 1,500

Farm labor (Rp/man-day) Land preparation 700 350 700 350 Planting 500 250 500 250 Crop management 700 350 700 350 Harvesting 800 400 800 400 Average (weighted) 700 350 700 350

/a The economic price of seed is equivalent to the economic farmgate price of the product assuming that with the project increased area and production of seed will be at the cost of either imports or exports of the relevant products. - 36 -

6.04 For years the Government has followed a low food price policy for the protection of consumers, and has simultaneouslysubsidized farm inputs such as fertilizersand pesticides for maintainingfarmer's incomes. As a result of this policy and the current and projectedhigh prices at world markets, there is a significantdifference between financial (actual farmgate level) and economic prices of both paddy and fertilizers. As shown in Table 6.2, the financial and economic prices of paddy are respectivelyRp 105/kg and Rp 191/kg at the end of 1981; and Rp 126/kg and Rp 230/kg in 1990.

Farm Incomes

6.05 Typical farm models for the Sitiung subprojectarea have been used for farm income analysis. Average farm sizes assumed are 1.75 ha for transmigrantfarms and 4.0 ha for indigenousfarms. It has been assumed that the farm family performs all farm work; hires labor in peak seasons (harvesting)and is employed on off-farm works during slack seasons. Financial prices of all farm inputs and outputs have been used in farm budgets which include all incurred production costs except unpaid farm family labor. Details of estimated farm incomes for these typical farms are presented in Table 6.3 and in Annex 2, Table 2.

Table 6.3: SUMMARY OF FARM INCOMES

Total farm income /a Per capita income /b Future Future Future Future Pres- without with Pres- without with ent project project ent project project …------(RpOOO) …------(US$) --

Sitiung Indigenous farm (4.0 ha) 365 378 637 106 110 185 Transmigrant farm (1.75 ha) 239 243 487 70 71 142

/a Total farm income including off-farm income; see also Annex 2, Table 2. 75 Average farm-familysize of 5.5 people.

6.06 In the Sitiung II subproject both indigenousand transmigrantfarm families would substantiallyimprove their incomes. Per capita incomes of indigenous farmers are estimatedat $110 without the project, increasingto $185 with the project. Similarly transmigrantfarmers per capita incomes are estimatedat $71 without the project and $142 with the project. Per - 37 -

capita incomes are much lower than the national per capita income of $360 as: of 1980./l The current estimate of absolute poverty income in Indonesia is $112 per capita per year rising to about $134 by 1990. More than 90% of the benefitting farm families of the project are rural poor.

Project Charges

6.07 IPEDA. Farmers in Indonesia pay a national land tax (IPEDA) and water charges or irrigationservice contributions. IPEDA is collectedby the village head and turned over to local and provincialadministrations public services. IPEDA is assessed as a percentageof crop production. Transmigrantfarmers in Sitiung will be expected to pay IPEDA of about $16/ha (Rp 10,000/ha)when their land is fully developedand the project is transferredfrom central to local government.

6.08 Water Charges. Water charges are collectedby water users associationsand are earmarkedfor operation of the irrigationsystem below the secondaryturnouts (i.e., tertiary and quaternarycanals and drains). The level of charges varies from place to place and averages some 25 kg of paddy per ha for each cropping season. This amount is sufficient to pay for the services of a ditchrider(ulu-ulu) and where applicable,his assistants; sometimesditchriders receive a plot of village-ownedland in lieu of charges. Water charges of $10/ha (Rp 6,300/ha)per year are expected to be collected.

6.09 Cost Recovery. The direct cost recovery index, which is the ratio of the present value of incrementalrevenue (IPEDA and water charges) to the present value of incrementalfinancial costs of the project, is estimatedat 4%. However, the indirect cost recovery index, which is derived from government savings for rice procurement/2is about 106%.

/1 Although comparisonsof farm income based on farm budgetswith income data based on national accounts must be interpretedwith caution they are an approximationof the relative poverty of project beneficiaries.

/2 Without projects,GOI would have to import rice at a price equivalentto $356/ton in 1985 as paddy while with project it could procure paddy domesticallyat a substantiallylow price of $195/ton resulting in a gross saving of $161/ton. This is equivalentto a net saving of about $142/ton,after netting out government subsidiesfor fertilizersand agro-chemicals,which could be consideredan indirect cost recovery from project farmers. - 38 -

6.10 Taking into account both direct and indirect cost recovery, farmers in the Sitiung project area would contributeas much as $620/ha per year to governmentwith a total cost recovery index as high as about 110%. On average, farmers would pay about 12% of their net profits (project rent) for IPEDA and water charges. This level is consideredreasonable because most of the beneficiaries,especially transmigrants,are poor. Table 6.4 indicates in detail these rent recovery and cost recovery indices.

Table 6.4: COST AND RENT RECOVERY INDEXES AT SITIUNG II

Rent Recovery Index (%/f arm) 7a Indigenous 11.0 Transmigration 13.4

Cost Recovery Index (%/ha) Direct /b 4 Indirect /c 106

Total 110

/a The Rent Recovery Index is the ratio of the present value of incremental revenue (IPEDA and water charges) to the present value of project rents both calculated at 10% discount rate.

/b The Direct Cost Recovery Index is the ratio of the present value of incrementalrevenue (IPEDA and water charges) to the present value of incrementalfinancial costs, both calculatedat 10% discount rate.

/c The indirect Cost Recovery Index is the ratio of present value of incrementalsavings on government expendituresfor rice procurement (i.e., differencebetween economic price and financialprice of paddy) to the present value of incrementalfinancial costs, both calculatedat 10% discount rate and per ha basis. - 39 -

7. BENEFITS AND JUSTIFICATION

Project Benefits and Beneficiaries

7.01 The Sitiung II project would increase food crop production, employment opportunities,government savings, and reduce rural poverty. About 36,000 tons of paddy would be produced annually. About 38,000 people or 7,000 families would benefit directly,while about 1,000 families of landless laborers would benefit indirectly. Civil works would generate some 21 million man-days of constructionlabor. The project would create a demand about 2 million man-days of farm labor each year equivalent to about 6,000 additional full-timejobs. More than 90% of project farmers are rural poor, and would increase their family income by about 150-200%. GOI would save foreign exchange of about $20 million annually by reducing rice imports. Investmentcosts per benefittingfamily to achieve these benefits are about $4,500,inline with normal costs for constructionof a new irrigation system.

Major AssumptionsUsed in Economic Analysis

7.02 Direct Tangible Benefits. Incrementalproduction generated by the project is valued in economic prices (at end-1981 constant dollars) net of incrementalproduction costs, includingfarm-family labor. Savings of pumping costs for Sitiung'sStage I as gravity supplies become available under the project, are consideredeconomic benefits generated by the project. Table 7.1 summarizes these benefits.

Table 7.1: ECONOMIC BENEFITS AT FULL DEVELOPMENT

Crop Other production benefits Total Benefits/ha ------($ 000) ----- ______

Batang Piruko (1,000 ha) 1,449 480/a 1,929 1,929.6 Batang Siat (5,700 ha) 8,250 - 8,250 1,447.4

Total 9,699 480 10,179 1,519.2

Total Project 25,905 506 26,411 -

/a Cost savings for pumping. - 40 -

7.03 Labor Pricing. In the transmigrationarea employmentopportunities are extremely limited. Most opportunitiesat present are provided by constructingthe Sitiung Stage I irrigationsystems, which are almost completed. As a result, farm wages are low, averaging about Rp 700 per man-day; economic wages have consequentlybeen assessed at about 50% of market values (Rp 350 per man-day) as for similar Bank-assistedprojects in Indonesia./1

7.04 Foreign Exchange. The present official exchange rate of US$1.00 Rp 625 is consideredto reflect the value to the economy of the foreign exchange used in constructingthe project and saved through increasedgrain production. A standard conversionfactor of 1.0 has thereforebeen used.

7.05 DevelopmentPeriod. The Sitiung II subprojectis expected to be fully developed 8 years after completionof the irrigationsystem.

7.06 Economic Life. A 30-year economic life is assumed.

7.07 Economic Cost.' In calculatingeconomic returns physical contingencies have been included in economic costs. Labor costs have been shadow priced in labor intensive civil works. The total economic constructioncost of the project is estimated at US$24 million (Rp 15 billion) at end-1981 prices, and following construction,annual O&M costs of $34,000have been included throughout the project life. Table 7.2 summarizes both the capital (financial)and economic costs of the Sitiung project during the construction phase.

/1 "Wages and Employment in Indonesia"by C. Lluch & D. Mazumdar, Bank Report No. 3586-IND, August 1981. - 41-

Table 7.2: ECONOMIC CONSTRUCTION COST ($ million)

Finan- Total cial Imputed Other Economic project labor labor costs costs cost costs costs /a (4)= (5)= Item (1) (2) (3) (I)-(2) (3)+(4)

Civil works 28.58 20.71 10.35 7.87 18.23 Consulting services /b 0.53 - - 0.53 0.53 Administration 2.15 - - 2.15 2.15 Physical contingency 4.69 3.11 1.56 1.58 3.13

Total 35.95 23.82 11.91 12.13 24.04

/a Shadow priced at Rp 350/man-day.

/b Including tertiary design cost of Batang Siat ($35/ha) and construction supervision cost of both Batang Piruko and Batang Siat areas ($10/ha).

Economic Rates of Return (ERR)

7.08 Using the foregoing assumptions the economic rates of return are calculated at 18% for Sitiung II as a whole and 20% and 17% for the Batang Piruko and Batang Siat systems respectively. Economic costs and benefits and their present values are summarized in Annex 2, Table 4.

Sensitivity Analysis

7.09 Crossover values /1 for a 10% discount rate were calculated for a number of variables crucial to the success of the project. The greater the difference between the crossover and appraisal values the less sensitive the ERR is to the tested variable. Table 7.3 summarizes the differences between the crossover and appraisal values for a number of variables and their combinations in the project area. Because the Batang Piruko system is largely independent of the Batang Siat system, it is analyzed separately.

/1 The crossover value is the value of the variable tested for which the project's net present value calculated at 10% discount rate is zero, or equivalently the value beyond which the ERR would be below 10%, the critical level for economic viability of the project. - 42 -

7.10 ERRs of the two systems are not sensitive to cost over-runs. An increase of total investmentcosts up to 140% of Batang Piruko and UD to 120% for Batang Siat would be required to reduce the ERR's to 10%. Similarly, the total benefit streams would have to decrease by about 50% holding other assumptionsconstant, to reach the same result. Incremental paddy yields would have to drop by 49% to lower the ERR to Batang Siat to 10%, while the Batang Pirako incrementalyields would have to fall by 70% to reduce the ERR to 10%, because of the importanceof cost savings for pumping in this system. Only a catastrophicdrop in the world price of rice may jeopardizeERRs. A delay on constructioncompletion or materialization of the benefit streams by 7.0 years would not jeopardizethe economic viability of the project. Finally in a worst combinationof these variables, assuming a 3-year delay of entire benefit streams, the ERR would still remain at 10% as long as paddy yields would attain 3.5 tons per hectare. The results of these analyses show that the Sitiung project componentsare economicallyviable even under adverse conditions.

Risks

7.11 The project does not entail major risks. Very high cost over-runs, higher than experiencedin the past, and very long delavs would have to occur to render the project unattractive. The developmentof Sitiung II, though clearly depending on increasing the soils initial low productivity,is supportedby encouragingresults from the contiguousMimpi irrigation project developed before World War II, and cropping trials in the area. The risk is small consideringGOI commitment to support Javanese farmers resettled in this area, and the economic robustnessof the proposed development(Table7.3). Table 7.3: SENSITIVITY ANALYSIS - COMPARISON OF VALUES AT APPRAISAL AND CROSSOVER FOR A 10% DISCOUNT RATE

Batang Piruko Batang Siat Sitiung II Cross- Cross- Cross- Appraisal over % Appraisal over %. Appraisal over % Items Unit value value change value value value value value change

Total investment costs $ mln 5.0 12.0 140 19.0 41.8 120 24.0 53.3 122 Total annual benefit at full development $ mln 1.9 0.9 -53 8.3 4.2 -49 10.2 5.1 -50 Average incremental paddy production at full development kg/ha/yr 5,288 1,586 -70/b 5,288 2,697 -49 5,288 2,538 -52 Projected world price of rice /c $/ton 638.0 191.4 -70/b 638.0 370.0 -49 638.0 306.2 -52

Delay of benefit stream year 0 7.5 - 0 6.3 - 0 7.0 - 4 Total investment costs with 3-year delay of benefit stream $ mln 5.0 8.7 74 19.0 30.2 59 24.0 38.6 61 Incremental paddy production with 3-year delay of benefit stream Kg/ha/yr 5,288 322.6 -39 5,288 3,596 -32 5,288 3,437 -35

/a Benefits from secondary crops are estimated at about 28% in the tertiary areas and none in the Jatiluhur and Sitiung areas. /b Benefits in Batang Piruko including rice production (about 75%) and cost savings (about 25%). 7& Bank projections in 1990 based on f.o.b. price of 5% broken Thai rice. - 44 -

8. AGREEMENTSAND RECOMMENDATIONS

8.01 During negotiations,agreement was reached with GOI on the following:

(a) GOI will employ consultantsfor the following subprojectsby the dates below:

Subproject Latest Date

Sitiung II August 1, 1982 DGWRD Management Systems January 1, 1983 Water User Training April 1, 1983 Financial Control Systems January 1, 1983

Consultantswill be employed also for Hydraulic Data Colletion and Processing,Cisanggarang River Basin study and the Jatigede Detailed Design. The qualifications,experience and terms and conditions of employment of consultantswould be satisfactoryto the Bank, and their employmentwould be made in accordancewith principles and procedures satisfactoryto the Bank on the basis of "Guidelineson the Use of Consultantsby World Bank Borrowersand the World Bank as Executing Agency," published by the Bank in August 1981 (draft Loan Agreement, Section 3.02).

(b) GOI will provide adequate funds for and take action as necessary to acquire in the year precedingconstruction all land and rights in respect of land required for the constructionand operation of the facilities included in the project and in all other Bank supported irrigationprojects (draft Loan Agreement, Section 3.05).

(i) maintain records adequate to reflect operations,resources and expendituresin respect of each part of the Project including separate accounts and records for statementsof expenditure,and maintain such records until at least one year after the ClosingDate;

(ii) have such accounts and financial statementsfor each fiscal year, and statementsof expenditureaudited by independent auditors acceptableto the Bank; - 45 -

(iii) furnish to the Bank not later than nine months after the end of each fiscal year, (A) certified copies of its financial statements and (B) audit reports of such scope and in such detail as the Bank shall have reasonably requested (draft Loan Agreement, Section 4.02).

(d) GOI would:

(i) cause all facilities rehabilitatedor constructedunder the project and all other irrigation projects assisted by the Bank to be adequately operated and maintained,and would ensure the efficientuse of the water made available for agriculturaldevelopment and operations;

(ii) ensure that adequate staff are employed and funds allocated for the proper operation and maintenanceof the irrigation systems and that by August 15 in each fiscal year, provide liquid funds equal to but not less than half the amount budgetted for operation and maintenanceduring the FY and the balance in equal quarterly installments;

(iii) progressivelyincrease the number of qualified operation and maintenancestaff until adequate staff levels, establishedin consultationwith the Bank, have been attained; and

(iv) inform the Bank by May 1 of each year, of the approved budgets for O&M of irrigationsystems; and by October 1, of the staff provisions made (draft Loan Agreement, Section 4.03).

(e) GOI would:

(i) before the design phase for the constructionof any tertiary network, ensure that water-user associationsparticipate in the planning of such networks;and

(ii) during the design phase for any tertiary network exchange views with water-users associationsto ensure that the members agree with the objectives and operating procedures and thereafter operate and maintain the networks (draft Loan Agreement, Section 4.04).

(f) GOI would:

(i) comprehensivelyconsider the duties and responsibilities of the Ministry of Agriculture-sextension services,DGWRD provincial irrigation services, the Ministry of Home Affairs and its local administrationfor establishing,training and assistingwater-user associations;and - 46 -

(ii) not later than July 1, 1983 furnish to the Bank for comments, the findings and recommendationsthereby obtained and promptly thereafter cause the agency or agencies selected on the basis of such review to undertake the training and support of the wateruser associationstaking into account the comments made by the Bank (draft Loan Agreement, Section 4.05).

(g) By April 1983, DGH will implement land clearing for about 1,800 ha at the Sitiung II project, and promptly after irrigationwater is supplied to each part of the project, the DGFCA will organize, supervise and provide credit for clearing, levellingand bunding about 2,500 ha, and levellingand bunding about 3,600 ha of the irrigation area (draft Loan Agreement, Section 4.06).

(h) GOI would ensure that sufficient liquid funds will be made available to PROSIDA, PIBD, DGH, DGFCA, Proyek Cimanuk and Project Hydrologi not later than May 1 of each year for the ensuing GOI fiscal year to cover budgeted expendituresfor the project (draft Loan Agreement, Section 3.01).

8.02 With the above assurances,the project would be suitable for a Bank loan of $37 million, with a 20 year maturity, includinga grace period of 5 years. The Borrower would be the Republic of Indonesia.

8.03 A Condition of Loan Effectivenesswill be that at least one of the two contractsfor constructionof the Batang Piruko headrace canal in the Sitiung II subproject has been tendered, evaluated,and the notice of award issued by the Project Manager (draft Loan Agreement, Section 5.01). ANNEX 1 - 47 Table 1

INDONESIA

IRRIGATION PROJECT XVI

Cost Estimate

Foreign Base Local Foreign Total Local Foreign Total exchange cost (Rp million) ---- - ($'000) ------(%) ()

Civil Works Sitiung II Land acquisition 46 - 46 74 - 74 0 - Construction /a 9,426 8,436 17,862 15,081 13,498 28,579 47 56 Consultants /b 174 180 354 279 287 566 51 1 Administration 1,370 - 1,370 2,192 - 2,192 0 4

Base Cost 11,016 8,616 19,632 17,626 13,785 31,411 44 61

Physical contingencies 2,203 1,724 3,927 3,525 2,758 6,283 44 Expected price increases 3,314 1,495 4,809 5,303 2,392 7,695 31

Subtotal 16,533 11,835 28,368 26,454 18,935 45,389 42

Taxes on civil works 1,350 - 1,350 2,159 - 2,159 0

Total 17,883 11,835 29,718 28,613 18,935 47,548 40

Design and Studies Consultants 889 1,569 2,458 1,423 2,510 3,933 64 8 Contracted services 137 482 619 218 772 990 78 2 Equipment and vehicles 11 217 228 18 347 365 95 1 Administration 165 - 165 264 - 264 0 -

Base Cost 1,202 2,268 3,470 1,923 3,629 5,552 65 11

Physical contingencies 180 340 520 289 544 833 65 Expected price increases 368 465 833 589 744 1,333 56

Total 1,750 3,073 4,823 2,801 4,917 7,718 64

Institutional Support Consultants 978 1,509 2,487 1,565 2,415 3,980 61 8 Civil works 953 792 1,745 1,525 1,268 2,793 45 5 Equipment, programs, vehicles /c 10 2,238 2,248 16 3,581 3,597 99 7 Training 1,719 112 1,831 2,750 180 2,930 6 6 Administration and support 570 30 600 912 47 959 5 2

Base Cost 4,230 4,681 8,911 6,768 7,491 14,259 53 28

Physical contingencies 634 703 1,337 1,015 1,124 2,139 53 Expected price increases 1,756 1,244 3,000 2,810 1,990 4,800 41

Subtotal 6,620 6,628 13,248 10,593 10,605 21,198 50

Taxes on civil works 87 - 87 139 - 139 0

Total 6,707 6,628 13,335 10,732 10,605 21,337 50

GRAND TOTAL 26,340 21,536 47,876 42,146 34,457 76,603 45

/a End-1981, without taxes (6 minor additions to services financed under Irrigation IX (Loan 1435-IND). /b Including consultants' preparation and construction supervision assistance, excluding taxes. 7W Including computer programs, audio visual and teaching aids, facilities and cars. INDONESIA

IRRIGATION PROJ1CT XVI

Schedule of Expenditures ($ '000)

Indonesia Fiscal Year /a 1982/83 1983/84 1984/85 1985/86 1986187 Total Local Foreign Total Local Foreign Total Local Foreign Total Local Foreign Total Local Foreign Total Local Foreign Total

CONSTRUCTIONPACKAGE Sitiung II - Civil Works Batang Piruko Land acquisition 74 - 74 _. ------74 - 74 Headvorks 360 360 720 194 194 388 ------554 554 1,108 Headrace canal, structures 1,045 1,045 2,090 1,076 1,077 2,153 ------2,121 2,122 4,243 Tertiary systems Design /b 34 4 38 ------34 4 38 Construction (1,100 ha) - - - 119 21 140 125 22 147 ------244 43 287 Land clearing 48 26 74 53 29 82 ------101 55 156

Subtotal 1,561 1,435 2,996 1,442 1,321 2,763 125 22 147 ------3,128 2,778 5,906

Batang Siat Land acquisition ------Headworks 546 546 1,092 500 500 1,000 ------1,046 1,046 2,092 Headrace canal, structures 3,590 3,590 7,180 673 674 1,347 ------4,263 4,264 8,527 Distribution system, structures 1,315 1,315 2,630 1,086 1,087 2,173 2,576 2,576 5,152 ------4,977 4,978 9,955 Tertiary systems Design /b 126 14 140 80 8 88 ------206 22 228 Construction (6,500 ha) - - - 442 78 520 442 78 520 553 97 650 - - - 1,437 253 1,690 Land clearing 24 13 37 73 39 112 145 78 223 96 53 149 - - - 338 183 521

Subtotal 5,601 5,478 11,079 2,854 2,386 5,240 3,163 2,732 5,895 649 150 799 - - - 12,267 10,746 23,013

Expatriate consultant services 19 131 150 10 65 75 10 65 75 - - - - - 39 261 300 Adsinistration (7.5%) 1,067 - 1,067 606 - 606 459 - 459 60 - 60 - - - 2,192 - 2,192

Base Cost 8,248 7,044 15,292 4,912 3,772 8,684 3,757 2,819 6,576 709 150 859 - _ - 17,626 13,785 31,411

Physical contingencies 1,650 1,409 3,059 982 755 1,737 751 564 1,315 142 30 172 - - - 3,525 2,758 6,283 Expected price increases 1,386 718 2,104 1,633 756 2,389 1,821 856 2,677 463 62 525 - _ _ 5,303 2,392 7,695

12,810 6,329 4,239 10,568 1,314 242 1,556 - - - 26,454 18,935 45,389 Subtotal 11,284 9,171 20,455 7,527 5,283 610 505 - 505 75 - 75 - - - 2,159 - 2,159 Taxes on civil works 969 - 969 610 - 13,420 6,834 4,239 11,073 1,389 242 1,631 - - _ 28,613 18,935 47,548 Total Construction 12,253 9,171 21,424 8,137 5,283 Indonesia Fiscal Year /a 1982/83 1983/84 1984/85 1985/86 1986/87 Total Local Foreign Total Local Foreign Total Local Foreign Total Local Foreign Total Local Foreign Total Local Foreign Total

DESIGN AND STUDIES Cisanggarung Basin Study Consultant s Foreign 25 100 125 105 595 700 89 546 635 ------219 1,241 1,460 Local 65 7 72 155 17 172 131 15 146 - - - - - 351 39 390 750 Contracted services (drilling) - - - 40 160 200 110 440 550 ------150 600 365 Start-up vehicles and equipment - - - 10 190 200 8 157 165 ------18 347

Subtotal 90 107 197 310 962 1,272 338 1,158 1,496 ------738 2,227 2,965

Jatigede Dam - Detailed Design Consultants Foreign 75 425 500 130 733 863 ------205 1,158 1,363 720 Local 243 27 270 405 45 450 ------648 72 Contracted services 120 Drilling 15 85 100 3 17 20 ------18 102 100 Model tests 40 60 100 ------40 60 Mapping 10 10 20 ------10 10 20

Subtotal 383 607 990 538 795 1,330 ------921 1,402 2,323

Total 473 714 1,187 848 1,757 2,605 338 1,158 1,496 - _ - _ _ - 1,659 3,629 5,288

264 Administration 59 - 59 130 - 130 75 - 75 ------264 -

Base Cost 532 714 1,246 978 1,757 2,735 413 1,158 1,571 - _ _ _ _ - 1,923 3,629 5,552

Physical contingencies (15%) 80 107 187 147 263 410 62 174 236 - - - - 289 544 833 Expected price increases 86 70 156 311 337 648 192 337 529 - - - - _ _ 589 744 1,333

Total Design and Studies 698 891 1,589 1,436 2,357 3,793 667 1,669 2,336 - _ - _ _ - 2,801 4,917 7,718

INSTITUTIONAL SUPPORT DGWRDManagement Information System 150 Civil works - - - 25 25 50 25 25 50 25 25 50 - - - 75 75 Consultants - local - - - 297 33 330 333 37 370 270 30 300 - - - 900 100 1,000 50 Conputer programs - - - - 50 50 ------50 Staff training - local - - - 90 10 100 90 10 100 90 10 100 - - - 270 30 300 1,500 Equipment - - - - 500 500 - 500 500 - 500 500 - - - - 1,500

Subtotal - - - 412 618 1,030 448 572 1,020 385 565 950 - - - 1,245 1,755 3,000

axHI Indonesia Fiscal Year /a 1982/83 1983/84 1984/85 1985/86 1986/87 Total Local Foreign Total Local Foreign Total Local Foreign Total Local Foreign Total Local Foreign Total Local Foreign Total

INSTITUTIONAL SUPPORT (cont'd) Hydrologic Data Improvement Civil works - - - 285 286 571 428 429 857 237 238 475 - - - 950 953 1,903 Consultants - foreign - - - 51 287 338 61 344 405 61 344 405 30 172 202 203 1,147 1,350 Hydrologic equipment - - - - 364 364 - 450 450 - 200 200 - 235 235 - 1,249 1,249 Start-up vehicles and attachments - - - 16 32 48 ------16 32 48 Supports - - - 50 10 60 75 15 90 75 15 90 33 7 40 233 47 280 Overseas training _ - - - - - 75 75 - 75 75 - - - - 150 150

Subtotal - _ _ 402 979 1,381 564 1,313 1,877 373 872 1,245 63 414 477 1,402 3,578 4,980

Water User Training Civil works 500 240 740 ------500 240 740 Consultants 160 400 560 130 320 450 80 220 300 50 140 190 - - - 420 1,080 1,500 Equipment, supplies and materials - 400 400 - 350 350 ------750 750 Training costs 380 - 380 700 - 700 700 - 700 700 - 700 - - - 2,480 - 2,480

Subtotal 1,040 1,040 2,080 830 670 1,500 780 220 1,000 750 140 890 - _ - 3,400 2,070 5,470

Auditing Improvement Consultants - Foreign 15 85 100 - - - - _ ------15 85 100 - Local 27 3 30 ------27 3 30

Subtotal 42 88 130 ------42 88 130

Total 1,082 1,128 2,210 1,644 2,267 3,911 1,792 2,105 3,897 1,508 1,577 3,085 63 414 477 6,089 7,491 13,580

Administration 110 - 1O 196 - 196 195 - 195 154 - 154 24 - 24 679 - 679

Base Cost 1,192 1,128 2,320 1,840 2,267 4,107 1,987 2,105 4,092 1,662 1,577 3,239 87 414 501 6,768 7,491 14,259

Physical contingencies 179 169 348 276 340 616 298 316 614 249 237 486 13 62 75 1,015 1,124 2,139 Expected price increases 192 110 302 586 435 1,021 923 612 1,535 1,039 629 1,668 70 204 274 2,810 1,990 4,800

Total 1,563 1,407 2,970 2,702 3,042 5,744 3,208 3,033 6,241 2,950 2,443 5,393 170 680 850 10,593 10,605 21,198

Taxes on civil works 37 - 37 31 - 31 45 - 45 26 - 26 - - 139 - 139

Total Institutional Support 1,600 1,407 3,007 2,733 3,042 5,775 3,253 3,033 6,286 2,976 2,443 5,419 170 680 850 10,732 10,605 21,337

GRAND TOTAL 14,551 11,469 26,020 12,306 10,682 22,988 10,754 8,941 19,695 4,365 2,685 7,050 170 680 850 42,146 34,457 76,603

/a April 1 - March 31. 7S At $35/ha including design - $25/ha, community organizers $5.50/ha (pre-construction and construction) and $4.50/ha for subproject rural sociologist.

Q>Q - 51 - ANNEX 1 Table 3 Page 1

INDONESIA

IRRIGATION PROJECT XVI

Proposed Allocation of Loan Proceeds

Loan Disburse- Category TPC /a amount ment

$ Thousand

1. CIVIL WORKS Sitiung II Base cost 28,579 Contingencies 13,978

Subtotal 42,557 13,500 30

Institutional Support DGWRD - MIS Base cost 150 Contingencies 50

Subtotal 200 100 50

Hydrologic Data Improvement Base cost 1,903 Contingencies 497

Subtotal 2,400 1,200 50

Water User Training Base cost 740 Contingencies 160

Subtotal 900 900 100

2. EQUIPMENT Design and Studies Cisanggarung Basin Study Base cost 365 365 100

Institutional Support DGWRD - MIS Base cost 1,550 Contingencies 50

Subtotal 1,600 1,600 100

/a Total Project Cost. - 52- ANNEX 1 Table 3 Page 2

Loan Disburse- Category TPC amount ment

$ Thousand

Hydrologic Data Improvement Base cost 1,249 Contingencies 51

Subtotal 1,300 1,300 100

Water User Training Base cost 676 Contingencies 74

Subtotal 750 750 100

3. TRAINING DGWRD - MIS Base cost 300 Contingencies 100

Subtotal 400 400 100

Hydrologic Data Improvement Base cost 150 Contingencies 150

Subtotal 300 300 100

Water User Training Base cost 2,480 Contingencies 620

Subtotal 3,100 3,100 100

4. CONTINGENCIES Sitiung II Base cost 300 Contingencies 70

Subtotal 370 370 100

Cisanggarung Basin Study Base cost 2,600 Contingencies 570

Subtotal 3,170 3,170 100 -53 - ANNEX 1 Table 3

Page 3

Loan Disburse- Category TPC amount ment

$ Thousand

Jatigede Dam Design Base cost 2,323 Contingencies 507

Subtotal 2,830 2,830 100

Institutional Support DGWRD - MIS Base cost 1,000 Contingencies 200

Subtotal 1,200 1,200 100

Hydrologic Data Improvement Base cost 1,350 Contingencies 250

Subtotal 1,600 1,600 100

Water User Training Base cost 1,500 Contingencies 300

Subtotal 1,800 1,800 100

Auditing Improvement Base cost 100 Contingencies 30

Subtotal 130 130 100

5. UNALLOCATED Land acquisition - Sitiung II 74 Administration 3,415 Taxes on civil works 2,298 Vehicles provided by GOI under reserve procurement: DPMA 48 PROSIDA 74 Contingencies 5,722 2,385

GRAND TOTAL 76,603 37,000/a

/a 50% of total project cost, exclusive of taxes and reserve procurement. - 54 - ANNEX 1 Table4

INDONESIA

IRRIGATION PROJECT XVI

Estimated Schedule of Disbursements

Recent IBRD Fiscal Cumulative regional irrigation Year and disbursements disbursement profile semester ($ million) Percent (percent)

FY83 First 0.4 1 Second 1.5 4 3

FY84 First 3.5 9 Second 7.5 20 13

FY85 First 10 27 Second 14 38 28

FY86 First 17 46 Second 20 54 47

FY87 First 23 62 Second 26 70 68

FY88 First 30 81 Second 33 89 86

FY89 First 35 95 Second 37 100 97

Note: Disbursements during FY84, FY85 and FY86 are largely for Sitiung's civil works which are in an advanced stage of preparation. - 55 - ANNEX 1 Table 5 Page 1 INDONESIA

IRRIGATION XVI PROJECT

Sitiung Subproject - Batang Piruko

Civil Works - Quantity and Unit Price Estimates (Costs at end 1981)

Total cost Description Unit Quantity Unit cost financial ($)' ($°000)

Headworks Access Road km 10 24,000 240.0

Mobilization and Additional Site Investigations various 75.0

Clearing Site ha 2 1,344 2.7

Coffer Dams cu m 5,000 3.60 18.0

Headworks Excavation soft material cu m 12,000 3.00 36.0 Excavation rock cu m 1,000 10.80 10.8 Keeping foundations dry 30.0 Preparing weir foundation sq m 500 12.00 6.0 Masonry cu m 2,500 52.80 132.0 Apron concrete cu m 300 96.00 28.8 Reinforced concrete cu m 170 10.80 18.4 Mild steel,for reinforced concrete tons 17 1,200 20.4

Diversion Random fill for upstream and downstream coffer dams cu m 1,000 3.60 3.6 Impervious fill cu m 2,000 7.20 14.4 Random fill in dam shell cu m 4,000 5.40 21.6 Upstream masonry pitching sq m 700 9.60 6.7

Gates and Hoist Gear Sluice gates, 2 m x 1.5 m - 4 30,000 120.0 Hoist gear for sluices - 4 12,000 48.0 Canal intake gates, 2 m x 1.25 m - 2 18,000 36.0 Hoist gear for intakes - 2 6,000 12.0

Others Sediment trap - Various 120.0 Gabions, filters, boulders Various 60.0 Operators' quarters - Various 12.0 Removal of plant and site cleanup sum 12.0 Repairs to canal access road sum 24.0

Total Headworks 1,108.4 - 56- ANNEX 1 Table 5 Page 2

Total cost Description Unit Quantity Unit cost financial ($) ($'000)

Headrace Canal and Structures (17 km) Canals Excavation soft material for canal West of Trans Sumatra highway cu m 286,000 1.78 509.0 East of Trans Sumatra highway cu m 160,000 1.27 203.2 Excavation rock for canal cu m 14,000 9.20 128.8 Excavation from borrow or stockpile cu m 291,000 2.59 753.7 Place fill and compact West of Trans Sumatra highway cu m 398,000 1.42 565.2 East of Trans Sumatra highway cu m 83,000 0.95 78.9 Turf embankments sq m 154,000 0.82 126.3

Subtotal 2,365.1

Inspection Road (3 m wide) km 17 17,300 294.1

Aqueduct (200 m) 1 576,000 576.0

Offtake 1 28,800 28.8

Bridges 8 28,800 230.4

Inverted Siphon 1 384,000 384.0

Drop Structures 3 19,200 57.6

Culverts 8 38,400 307.2

Total Headrace Canal and Structures 4,243.2

Tertiary Networks ha 1,120 256 286.7

Total Civil Works Base Cost 5,932.4 - 57 - ANNEX 1 Table 5 Page 3 INDONESIA

IRRIGATION XVI PROJECT

Sitiung Subproject - Batang Siat

Civil Works - Quantity and Unit Price Estimates - (Costs at end-1981)

Total cost Description Unit Quantity Unit cost financial ($) ($'OO0)

Headworks Access Road km 3 24,000 72.0

Mobilization and Additional Site Investigations Various 250.0

Clearing Site ha 3 1,344 4.0

Diversion Channel and Coffer Dams Excavation soft material cu m 56,000 3.00 168.0 Excavation rock cu m 14,000 10.80 151.2 Random fill in coffer dams cu m 15,000 3.60 54.0

Headworks Keeping foundations dry 60.0 Excavate rock for foundation cu m 3,000 10.80 32.4 Excavate soft material for foundation cu m 15,000 3.00 45.0 Prepare rock surface sq m 1,500 4.10 6.2 Cement slurry sq m 1,500 4.10 6.2 Masonry in spillway, abutments and walls cu m 7,000 52.80 369.6 Reinforced concrete cu m 850 108.00 91.8 Mild steel for reinforced concrete tons 85 1,200 102.0

Removal Coffer Dams and Closure Diversion Channel Removal Various 12.0 Closing channel cu m 54,000 1.80 97.2

Flood Embankments Earth fill cu m 20,000 3.60 72.0 Rock pitching sq m 2,500 9.60 24.0

Gates and Hoist Gear Sluice gates, 3 m x 1.5 m 2 42,000 84.0 Guard gates 2 42,000 84.0 Hoist gear 4 18,000 72.0 Canal intake gates, 3 m x 2 m 2 48,000 96.0 Hoist gear 2 12,000 24.0

Others Operators' quarters 30.0 Removal of plant and site cleanup 30.0 Repairs to access road km 3 18,000 54.0

Total Headworks 2,091.6 ANNEX 1 -58 - Table 5 Page 4

Total cost Description Unit Quantity Unit cost financial ($) ($°000)

Headrace Canal and Structures Canals (24.5 km) Excavation soft material for canal West of Batang Piruko cu m 382,000 1.90 725.8 East of Batang Piruko cu m 24,000 1.27 30.5 Excavate rock for canal West of Batang Piruko cu m 20,100 9.20 184.9 Excavation from borrow or stockpile cu m 1,063,000 2.60 2,763.8 Place fill and compact West of Batang Piruko cu m 1,199,000 1.42 1,702.6 East of Batang Piruko cu m 105,000 0.95 99.8 Turf embankments sq m 332,400 0.82 272.6

Subtotal 5,780.0

Inspection Road (3 m) km 24.5 17,300 423.9

Aqueducts West of Batang Piruko 1 960,000 960.0 East of Batang Piruko 1 192,000 192.0

Offtakes 5 28,800 144.0

Bridges 12 28,800 345.6

Culverts Under Trans Sumatra highway 1 192,000 192.0 Others 17 28,800 489.6

Total Structures 2,747.1

Irrigation Network North of Batang Siat BSD 29-33/Ampalu - P. Pendam Canals km 10.7 N/A 480.0 Aqueducts - Offtakes Various 11 N/A 152.0 Bridges and siphons Various 5 N/A 57.6 Drop structures 1 3,200 3.2 Cross structures - - - Culverts 1 4,800 4.8

Subtotal 697.6

BSD 33-39/BSD 38-BSI/P. Mainan - Pendukuhan Canals km 10.2 N/A 932.8 Aqueducts - - Offtakes Various 10 N/A 156.8 Bridges and siphons Various 6 N/A 38.4 Drop structures - - - - Cross structures 1 20,800 20.8 Culverts Various 9 N/A 227.2

Subtotal 1,376.0

BSD 39-46 lg/Kupon - Bd. Sugianto Canals km 13.7 N/A 840.0 Aqueducts 1 32,000 32.0 Offtakes Various 14 N/A 172.0 Bridges and siphons Various 6 N/A 64.8 Drop structures Various 6 N/A 24.0 Cross structures 1 12,800 12.8 Culverts Various 7 N/A 54.4

Subtotal 1,200.0 -59 - ANNEX 1 Table 5 Page 5

Total cost Description Unit Quantity Unit cost financial (s) ($'000)

Lubuk Air - Kota Baru Canals km 7.7 N/A 145.6 Aqueducts 1 32,000 32.0 Offtakes Various 8 N/A 51.2 Bridges and siphons Various 2 1,600 3.2 Drop structures -- - - Cross structures - - - - Culverts Various 7 N/A 44.8

Subtotal 276.8

Teluk Puri Canals km 9.2 N/A 166.4 Aqueducts - Offtakes Various 10 N/A 62.4 Bridges and siphons Various 3 N/A 7.2 Drop structures 1 4,000 4.0 Cross structures - - - - Culverts Various 5 N/A 40.0

Subtotal 280.0

South of Batang Siat BS 17 - Siat Kupon Canals km 9.5 N/A 225.6 Aqueducts 1 576,000 576.0 Offtakes Various 10 N/A 73.6 Bridges and siphons Various 6 N/A 24.0 Drop structures Various 2 N/A 3.2 Cross structures - - - - Culverts Various 12 - 70.4

Subtotal 972.8

Siat Kiri Duri Canals km 11.5 N/A 969.2 Control structures N/A N/A 230.1 Culverts and bridges Various N/A N/A 211.2

Subtotal 1,410.5

BS 19 - BS 25 Canals km 8.9 N/A 839.5 Control structures N/A N/A 61.4 Culverts and bridges Various N/A N/A 90.9

Subtotal 689.8

Kayu Putih Canals km 8.23 N/A 274.8 Control structures N/A N/A 112.0 Culverts and bridges Various N/A N/A 768.6

Subtotal 1,155.4

Batang Siat Aqueduct 1 1,896,700 1,896.7

Total Irrigation Network 9,955.6

Tertiary Networks North of Batang Siat ha 4,026 256.0 1,030.7 South of Batang Siat ha 2,553 256.0 653.6

Subtotal 1,684.3

Total Civil Works Base Costs 22,258.6 ANNEX 1 - 60'- lable 6

INDONESIA

IRRIGATION PROJECT XVI

List of Equipment

Institution strengthening Design and studies DGWRD informa- Hydrologic Water user Cisanggarung Basin tion system data collection training Cost Cost Cost Cost Total Quantity $'000 Quantity $'000 Quantity $'000 Quantity $'000 $'000

Surveying Equipment Theodolites 3 30 30 Levels EDM 2 20 20 Tapes Compasses Tacheometers Accessories

Office Equipment Typewriters (electric) - Typewriters (manual) - Photocopiers 3 15 15 Electronic calculators - Drafting equipment - Plan printer 1 15 15

Computer hardware LS 75 LS 950 LS 77 1,102 Audiovisual equipment (Annex 6, p.9) LS 205 205 Teaching aids, program production LS 104 104 Sound equipment LS 90 90

Communication Teleprinters LS 600 600 Radio sets (SSB) LS 140 140 Word processors 2 47 47

Drilling & Climatologic Equipment 2" Rotary drill Accessories -

Hydrologic Equipment Current meters 2 4 10 20 24 Sediment samplers 8 8 16 16 24 Gauges, spares Boats 2 20 20 Climatological equipment 838 838 Recorders 298 298

Vehicles Land cruisers (long wheel base) 3 38 3/a 48 2 25 111 Mobile training units 8 200 200 Land cruisers (short wheel base) 5/a 50 50 Motorcycles 20/a 24 24

Total 365 1,550 1,297 745 3,957

/a Reserve procurement. -61- ANNEX 1 Table 7

INDONESIA

IRRIGATION PROJECT XVI

Consulting Services: Categories and Estimated Schedules (Man-months)

Indonesian fiscal year 1982/83 1983/84 1984/85 1985/86 1986/87 Total

Foreign Consultants Construction PIDB: Sitiung II construction supervision 12 6 6 - - 24

Design and Studies DOR: Cisanggarung basin study 10 56 51 - - 117 Jatigede Dam detailed design 40 69 - - - 109

Institution Strengthening Auditing 8 - - - - 8 Hydrologic data processing 12 48 48 - - 108 Water user training 45 36 24 15 - 120/a

Subtotal 127 215 129 15 - 486

Local Consultants Design and Studies Cisanggarung basin study Engineers 16 46 40 - - 102 Technicians 32 57 46 - - 135 Jatigede dam detailed design Engineers 60 100 - - - 160 Technicians 120 200 - - 320

Institution Strengthening Auditing 12 - - - - 12 DGWRD MIS 132 148 120 - - 400

Subtotal - Engineers 220 294 160 - - 674 - Technicians 152 257 46 - - 455

/a Including an equivalent number of man-months of local consultants. -62 - ANNEX I Table 8

INDONESIA

IRRIGATIONPROJECT XVI

ConsultingServices - Cost Breakdown /a (US$/man-month)

Expatriates Local consultants Foreign Local Total Foreign Local Total Item currency currency cost currency currency cost

Billing Rate Basic salary 3,160 - 3,160 - 830 830 Social benefits 850 - 850 - 190 190 Home office overhead 2,520 - 2,520 55 635 690 Overseas allowance 900 - 900 - 220/b 220 Net fee 470 - 470 - 140 140

Subtotal 7,900 - 7,900 55 2,061 2,070

ReimbursableExpenses Mobilizationand travel International travel 648 - 648 - - - Relocation 362 - 362 - - - Subsistence en route 69 - 69 - 40 40 Miscellaneous 141 - 141 - 20 20

Subtotal 1,220 - 1,220 - 60 60

Duty StationExpenses Local duty travel 200 - 200 40 - 40 Per diem - 320 320 - 55 55 Field office overhead - 500 500 - 55 55 Housing and utilities 480 1,060 1,540 30 65 95 Transport 820 - 820 125 - 125

Subtotal 1,500 1,880 3,380 195 175 370

Total 10,620 1,880 12,500/c 250 2,250/d 2,500

/a Based on recent contracts, projectedto end-1981 prices. Portion of foreign and local currency varies. /b Field allowance for local consultants. /c May vary between $10,000 and $14,200depending on nationalityand experience. /d Applies to engineers, senior agronomists,senior economistsand senior surveyors. Cost of draftsmen and techniciansaverages $1,000/man-month. - 63 - ANNEX2 Table I

INDONESIA

IRRIGATION PROJECT XVI

Sitiung (II) Irrigation

Crop Budgets

Irrigated rice (new sawah) Existing sawah Upland rice Groundnuts Maize Cassava Econ. Fin. Econ. Fin. Econ. Fin. Econ. Fin. Econ. Fin. Econ. Fin.

Present (1981) Yields (tons/ha) - 2.0 2.0 0.3 0.3 0.2 0.2 0.4 0.4 2.0 2.0 Price (Rp'000/ton) - 191.0 105.0 191.0 105.0 391.0 400.0 89.0 100.0 25.0 25.0 Gross value (Rp'000/ha) - 380.0 210.0 57.3 31.5 78.2 80.0 35.6 40.0 50.0 50.0 Cultivation - 42.0 42.0 ------Seed - 7.6 8.4 5.7 6.3 29.3 33.7 2.7 4.5 - - Urea - - - 3 7 1 4 5.5 2.1 5.5 2.1 - - TSP - - - 3.8 1.4 5.7 2.1 5.7 2.1 - - Agrochemicals - 19.5 3.8 6.5 1.3 ------Direct production cost - 69.1 54.2 19.4 10.4 40.7 37.9 13.9 8.7 - Gross margin - 312.9 155.8 37.9 21.1 37.5 42.1 21.7 31.3 50.0 50.0

Labor (man-days/ha) Land preparation - 40 40 25 15 30 Planting - 30 30 10 10 25 Crop management - 30 25 28 27 38 Harvesting - 55 45 40 38 65

Total _ 155 140 103 90 158

Future Without Project (1990) Yields (tons/ha) - 2.0 2.0 0.3 0.3 0.2 0.2 0.4 0.4 2.0 2.0 Price (Rp'000/ton) - 230.0 126.0 230.0 126.0 460.0 471.0 131.0 137.0 25.0 25.0 Gross value (Rp'000/ha) - 460.0 252.0 69.0 37.8 92.0 94.2 52.4 54.8 50.0 50.0 Cultivation - 42.0 42.0 ------Seed - 9.2 10.0 6.9 7.5 34.5 39.4 3.9 6.6 - - Urea - - - 4.6 1.8 6.9 2.7 4.6 1.8 - - TSP - - - 4.4 1.8 6.5 2.7 4.4 .1.8 - - Agrochemicals - 19.5 3.8 6.5 1.3 ------Direct production cost - 70.7 55.8 22.4 12.4 47.9 44.8 12.9 10.2 - - Gross margin - 389.3 196.2 46.6 25.4 44.1 49.4 39.5 44.6 50.0 50.0

Labor (man-days/ha) Land preparation - 40 40 25 15 30 Planting - 30 30 10 10 25 Crop management - 30 25 28 27 38 Harvesting - 55 45 40 38 65

Total _ 155 140 103. 90 158

Future With Project (1990) Yields (tons/ha) 3.0 3.0 3.5 3.5 - - - Price (Rp'000/ton) 230.0 126.0 230.0 126.0 - - - Gross value (Rp'000/ha) 690.0 378.0 805.0 441.0 - - - Cultivation 27.0 27.0 27.0 27.0 - - - Seed 8.1 8.8 8.1 8.8 - - - Urea 45.8 18.0 45.8 18.0 - - - TSP 21.8 18.0 21.8 18.0 - - - - Agrochemicals 13.0 2.5 13.0 2.5 - - - Direct production cost 115.7 74.3 115.7 74.3 - - - Gross margin 574.3 303.7 689.3 366.7 - - -

Labor (man-days/ha) Land preparation 55 55 - - - Planting 35 35 - - - Crop management 40 40 - - - Harvesting 75 75 - - -

Total 205 205 - - - - 64 - ANNEX 2 Table 2

INDONESIA

IRRIGATION PROJECT XVI

Farm Budgets - Sitiung Irrigation Areas

Indigenous farm Transmigrant farm (4.0 ha) (1.75 ha) P W/O 7I W P W/O W

Cropped Area (ha) 0.25 0.25 - - - _

Rainfed Rice 1.00 1.00 0.50 1.00 1.00 1.00 Upland crops: - Upland rice 0.45 0.45 0.23 0.45 0.45 0.34 - Maize 0.15 0.15 0.07 0.15 0.15 0.11 - Groundnut 0.15 0.15 0.07 0.15 0.15 0.11 - Cassava 0.25 0.25 0.13 0.25 0.25 0.19 Mixed forest rubber 2.75 2.75 2.75 - - - Irrigated Rice Existing sawah - - 0.50 - -- New sawah - - 0.90 - - 1.80

Uncropped land - - - (0.75) (0.75) - Total Cropped Areas 4.0 4.0 4.65 1.00 1.00 2.55 Cropping Intensity (%) 100 100 116 57 57 1.46 Crop Production (kg) Paddy 635 635 4,519 135 135 5,502 Maize 60 60 30 60 60 44 Groundnut 30 30 15 30 30 22 Cassava 500 500 250 500 500 380 Dry rubber 825 825 825 - - - Farm Income (Rp '000) Gross value of prod. 355.4 373.1 845.0 44.7 51.9 719.1 Prod. cost exclude labor 25.2 27.8 111.0 11.7 13.8 144.0 Hired labor (hour) 35.5 37 3 84.5 4.4 5.2 71.9 Net Value of Prod. 294.7 308.0 649.5 28.6 32.9 503.2

Taxes /b - - 12.2 - - 16.3

Net Income Owner-operator 294.7 308.0 637.3 28.6 32.9 486.9 Off-farm income /c 70.0 70.0 - 210.0 210.0 - Total Net Income (Owner-operator) 364.7 378.0 637.3 238.6 242.9 486.9 Total Labor Requirement (man-days) /d 390.0 390.0 572.0 131.0 131.0 467.0

/a 10% of gross value of production. lb Based on IPEDA charges and water fee per ha. /c Mission estimates. /d Computed from labor required as per crop budgets. INDONESIA

IRRIGATION PROJECT XVI

Crop Economic Benefits at Sitiung II

Future without project Ftiture with project Tncremental Benefits Gross Total Imputed Total Gross Total Imputed Total Total Total margin gross labor net crop margin gross labor net crop produc- net crop Crop area Production per ha margin costs income Crop area Production per ha margin costs income tion income ('000 ha) ('000 ton) (Rp'000) ----- (Rp million) ------('000 ha) ('000 ton) (Rp'000) ----- (Rp million) ------('000 ton) (Rp mln)

Piruko (1,000 ha) Upland crops (100%) 0.35 0.26 46.1 16.2 16.2 0.0 - - - - (0.26) 0.0 Upland rice (45%) 0.16 0.05 46.6 7.5 7.8 (0-3) ------Groundnut (15%) 0.05 0.01 44.1 2.2 i.R 0.4 - - - - _ _ _ _ Maize (15%) 0.05 0.02 39.5 2.0 1.6 0.4 ------a Cassava (25%) 0.09 0.18 50.0 4.5 5.0 (0.5) ------

Mixed forest 0.42 - 31.3 13.1 13.1 0.0 - - - - - Sawah Existing sawah 0.23 0.46 389.3 89.5 12.5 77.0 0.46 1.61 689.3 317.1 33.0 2R4.1 1.15 207.1 New sawah ------1.39 4.17 574.3 7a8.3 99.7 60a.6 4.17 606.6

Total 1.10 0.72 - 122.0 45.0 77.0 1.95 5.78 - 1,118.5 135.8 982.7 9.06/c 9n5.7

Cropping intensity (%) 100.0% 17R.0%

Siat (5,700 ha) Upland crops (100%) 3.42 2.48 46.1 157.5 157.5 0.0 ------(2.46) n.0 Upland rice (45%) 1.54 0.46 46.6 71.8 75.7 (3.7) ------Groundnut (15%) 0.51 0.10 44.1 22.5 18.4 4.1 ------_ Maize (15%) 0.51 0.20 39.5 20.2 16.1 4.1 ------_ Cassava (25%) 0.86 1.72 50.0 43.0 47.5 (4.5) ------

Mixed forest 1.90 - 31.3 59.5 59.5 0.0 ------Sawah Existing sawah 0.36 0.76 389.3 147.9 20.6 127.3 0.76 2.66 669.3 523.9 54.5 469.4 I.0n 342.1 New sawah ------9.58 28.74 574.3 5,901.R 687.4 4,914.4 26.74 4,614.4

Total 5.70 3.24 - 364.9 237.6 127.3 10.34 31.40 - 6,025.7 741.0 5,283.R 27.16/c 5,156.5

Cropping intensity (X) 100.0% 1-1.4%

/a Including the increase of 39,600 tons of paddy, 4,000 tons of corn and 5,700 tons of soybean in tertiary areas. /b Increase of 6,100 tons of paddy in S. Jatiluhur area. 7@ Including the increase of 35,960 tons of paddy and decrease of 2,740 tons of upland crops in Sitiung (IT) areas. - 66-

ANNEX2 Table 4

INDONESIA

IRRIGATION PROJECT XVI

ECONOMICCOSTS, BENEFITS AND RATE OF RETURN (US$ million)

Costs Total Cash Year Capital O&M Total Benefits flow

A. B. Piruko (1,000 ha)

1982 2.21 0.07 2.28 - -2.28 1983 2.64 0.10 2.74 - -2.74 1984 0.18 0.19 0.37 0.51 0.14 1985 - 0.13 0.13 0.75 0.62 1986 - 0.13 0.13 0.89 0.76 1987 - 0.12 0.12 1.15 1.03 1988 - 0.11 0.11 1.45 1.34 1989 - 0.09 0.09 1.66 1.57 1990 - 0.09 0.09 1.81 1.72 1991 - 0.09 0.09 1.89 1.80 1992-2012 - 0.09 0.09 1.94 1.85

Net Present Value at 10% discount rate 4.33 0.99 5.32 11.37 6.05 at 20% discount rate 3.78 0.55 4.33 4.36 0.03

Economic Rate of Return 20.1%

B. B. Siat (5,700 ha)

1982 8.03 0.04 8.07 - -8.07 1983 4.53 0.20 4.73 - -4.76 1984 5.05 0.40 5.45 0.36 -5.09 1985 1.04 0.91 1.95 0.45 -1.50 1986 - 0.80 0.80 0.98 0.18 1987 - 0.88 0.88 2.18 1.30 1988 - 0.53 0.53 3.09 2.56 1989 - 0.53 0.53 4.48 3.95 1990 - 0.49 0.49 5.76 5.27 1991 - 0.25 0.25 6.90 6.65 1992 - 0.25 0.25 7.58 7.33 1993 - 0.25 0.25 8.03 7.78 1994 - 0.25 0.25 8.19 7.94 1995-2012 - 0.25 0.25 8.26 8.01

Net Present Value at 10% discount rate 15.55 3.76 19.31 37.95 18.64 at 20% discount rate 13.26 2.06 15.32 12.03 -3.29

Economic Rate of Return 17.1%

Overall ERR (A+B) 17.5% -67- ANNEX 2 Table 5

INDONESIA

IRRIGATION PROJECT XVI

Rent Recovery for Average Farms

Sitiung Indige- Transmi- nous grant Incremental values farm farm (Rp '000) (4.0 ha) (1.75 ha)

11.1 11.1 Gross value of production 471.9 667.2

Less: Cash production costs 83.2 130.2 Harvesting costs 47.2 66.7

Equals: Net cash income 341.5 470.3

Less: Imputed value of family labor /a 63.7 117.6 Imputed value of manager /b 17.1 23.5 Allowance for risk /c 102.4 141.1 General taxes /d 47.2 66.7

Equals: Project rent 111.1 121.4

Rent as % of net cash income 32.5 25.8 Land tax /e 7.5 10.0 Water charge (O&M) /f 4.7 6.3

Total Direct Charges 12.2 16.3

Rent recovery index (%) /g 11.0 13.4 Farm income per capita (US$) /h 185.4 141.6

/a At Rp 350/day based on total labor requirements. 7; 5% of net cash income. 7W 30% net cash income. 7W 10% of gross value of production. 7e Based on Rp 1,000/ha incremental IPEDA charges in Jatiluhur area, and Rp 10,000/ha total IPPEDA in Sitiung irrigated lands. |f Based on Rp 6,300/ha charges in Sitiung area and incremental charges Rp 2,85/ha in other project areas. /g Project rent . direct charges x 100. /h Based onI total net farm income with project and farm size of 5.5 persons -68 - ANNEX 3 Page 1

INDONESIA

IRRIGATION PROJECT XVI

Schedule of Early Events

Activity Target Date

A. Employment of Consultants

1. Invitations for consultant services except DGWRD Management System and Water User Training Issued October 16, 1981

2. Proposed awards cleared with Bank for (1) April 1982

3. Sitiung II Construction Supervision contract negotiated with consultants, cleared with Bank, and approved by GOI procurement control agencies. August 1982

4. Revision of TOR for DGWRD Management Systems and approval by Bank of invitation for proposals May 1982

5. Revised invitations for Water User Training Consultant services submitted for Bank review May 1982

6. Proposed awards for DGWRD Management Systems, Water User Training, and Financial Control Systems consultant services submitted for Bank review October 1982

7. Contracts for DGWRD Management Systems, financial control systems, negotiated with consultants, cleared with Bank and approved by GOI procurement agencies January 1983

B. Construction I

1. Completion of design for Batang Piruko and Batang Siat headworks June 1982 - 69 - ANNEX 3 Page 2

Activity Target Date

2. Contracts awarded for construction of Batang Piruko headrace canal, and contracts B55 and B56 for main and secondary systems July 1982

3. Contract awarded for construction of Batang Piruko and Batang Siat headworks January 1983

4. Contract awarded for construction of Batang Siat headrace canal July 1983

C. Land Clearing

1. Contracts awarded by DGH for clearing 1,800 ha of land April 1983 - 70 - ANNEX 4 Table 1

INDONESIA

IRRIGATION PROJECT XVI

Average Monthly Rainfalls at Sitiung (1964-1973) (mm)

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total

Average Monthly Rainfalls Sitiung /g 254 260 243 389 197 134 105 130 133 166 325 292 2,628 -71 - ANNEX 4 Table 2

INDONESIA

IRRIGATION PROJECT XVI

Demand and Supply for a 1:5 Dry Year for 4,400 ha at Batang Hari Pumping Plant

Project water Dependable river flow Pumping demand /a from Batang Piruko /b requirement Month Period ------(cu m/sec) ------

1 2.26 0.00 Jan 2 2.52 3.34 0.00 3 2.00 0.00 1 2.90 1.14 Feb 2 2.95 1.76 1.19 3 2.64 0.88 1 4.50 0.36 Mar 2 4.70 4.14 0.56 3 3.62 0.00 1 3.17 0.00 Apr 2 3.42 4.87 0.00 3 2.39 0.00 1 3.16 1.03 May 2 4.34 2.13 2.21 3 4.46 2.33 1 2.54 1.73 Jun 2 2.74 0.81 1.93 3 2.38 1.57 1 0.71 0-45 Jul 2 0.13 0.26 0.00 3 0.00 0.00 1 0.00 0.00 Aug 2 0.00 0.00 0.00 3 0.00 0.00 1 3.30 2.31 Sep 2 3.43 0.99 2.44 3 4.01 3.02 1 7.57 4.74 Oct 2 6.15 2.83 3.32 3 5.37 2.54 1 5.37 4.07 Nov 2 4.72 1.30 3.42 3 3.43 2.13 1 2.39 0.26 Dec 2 4.01 2.13 1.88 3 4.01 1.88

/a based on an overall project efficiency of 68% at pumping plant. /b Conveyed to the pumping plant, net of compensation flow of 0.5 cu m/sec at a diversion efficiency 90%, and a conveyance efficiency 85%. Source: Project Feasibility Report by Sir William Halcrow & Partners, 7/1980. - 72 - ANNEX 4 Table 3

INDONESIA

IRRIGATION PROJECT XVI

Demand and Supply for a 1:5 Dry Year for 6,700 ha at BSD 30A

Dependable river Project water flow from Batang Deficit demand /a Siat at BSD 30 A /b % of Month Period (cu m/sec) (cu m/sec) cu m/sec demand

1 3.39 Jan 2 3.77 12.45 3 3.00 1 4.55 Feb 2 4.45 9.86 3 3.87 1 6.77 Mar 2 7.35 14.22 3 5.42 1 4.74 Apr 2 5.03 20.44 3 3.58 1 4.64 May 2 6.48 10.91 3 6.68 1 3.75 Jun 2 4.06 5.67 3 3.48 1 1.06 Jul 2 0.19 3.48 3 0.00 1 0.00 Aug 2 0.00 1.83 3 0.00 1 4.93 Sep 2 5.13 5.78 3 6.00 0.22 3.7 1 11.32 1.51 13.3 Oct 2 9.19 9.81 3 8.03 1 8.07 Nov 2 7.06 8.67 3 5.13 1 3.58 Dec 2 6.00 10.08 3 6.00

/a Based on an overall project efficiency of 68% at BSD 30 A. 7F Conveyed to BSD 30A, net of a compensation flow of 0.5 cu m/sec, at a diversion efficiency of 90% and a conveyance efficency of 85%. Source: Project Feasibility Report by Sir William Halcrow & Partners, 7/1980. - 73- ANNEX 5 Page 1

INDONESIA

IRRIGATIONXVI PROJECT

Training for Water Users in Tertiary IrrigationOperation and Maintenance

1. The target area of the training program consists of the cropped areas for which tertiary systems have been constructedor rehabilitatedunder Bank loans.

2. The ultimate beneficiarypopulation is estimated to be 11 million rural people consistingof about 2.0 million farm families some 780,000 ha.

3. GOI operates and maintains the main irrigationworks and distribution systems to the secondary turnouts. Water users with support from local officialsand local governmentoperate and maintain the tertiary systems. Insufficientunderstanding at the local level hampers cooperative effort to operate and maintain the systems effectively. Deteriorationof the system; siltation,damage to gates and turnouts, canal breaks and leaks results in unreliable,untimely and inequitabledistribution of water. The result is poor use of water and reduced crop yield.

4. There is a need for a clear, consistentunderstanding of system operation and maintenanceamong the various local officialsand groups. These include the local level officialsstemming from DGFCA (PPLs - Agriculturalextension agents), DGWRD (Jurus - water master, ulu ulu's - ditch riders), ASDO (AgriculturalSubdistrict Officers), Ministry of Interior (Lurahs - village chiefs), P3As (representativesof Water User Associations),and Key Farmers and village leaders. To date no effective training program has been directed to the problems of operationand maintenanceof tertiary and inter-farmwater distributionsystems. Training subject matters would deal with soil-water-croprelationships, irrigation timing, turn-out and ditch maintenance,cooperative organization and mobilizationof resources for maintenance.

5. The BIMAS program and the agriculturalextension services deliver a package program of improved seeds, fertilizerpractices, pesticides, farming and irrigatedcrop practices to farm groups, which may or may not coincide with water user associations. It works directlywith farmers and does not directly address the problem of water distribution,system organization,and operation and maintenance. Training by the Jatiluhur Authority trains three separate target audiences, irrigationpersonnel, water user associationrepresentatives, and key farmers. The courses do not include PPLs, (extensionagents) nor Lurahs (village chiefs), and results have not been yet been evaluated. -74- ANNEX 5 Page 2

6. The training objectiveis a unified understandingof operationand maintenanceof inter-farmwater distributionsystems among the local personnel of Agriculture,Irrigation and Local Government,and the water user associationsand key farmers. Three target audiences for training are identified:

7. Target Group A are middle level (districtor subprovincial) officialsof Agriculture,Ministry of Interior (Kabupaten)and Irrigation personnel. These would include Extension Supervisorsand subjectmatter specialists,district officers and selected staff and irrigationsection chiefs. The purpose or training objectivefor this groups is to acquaint them with the program, secure their participationand suggestions,and to enlist their support and commitmentto the training program of target groups 2 and 3. The format of the course would be similar, with structureddis- cussions aimed at finding solutions to problems of tertiary irrigation system operation and maintenance. Training duration is envisagedas one week in groups not to exceed 20. Total target group is 6,000 and 30% would receive training which would be completedwithin the first 1-1/2 years of the project.

8. Target Group B consists of representativesof water user associations(12,000) and lower level and local governmentstaff as follows:

a. PPLs (Agric. extension Agents) 900 b. ASDOs (Agric. SubdistrictOfficers) 300 c. Lurahs (village chiefs) 2,000 d. Juru's (subsectionwater masters) 1,200 e. Ulu-ulu's (canal patrolmen) 2,000

6,400 Plus P3A representatives 12,000

18,400

9. Because two thirds of the group are P3As (WUA Representatives) enrollment of P3As would be limited to 40% of course enrollmentin the common courses, to attain course balance. A typical course composition would be as follows:

PPLs ASDOs Lurahs Juru's Ulu-ulu's P3As Total

3 1 7 4 7 15 37 -75 ANNEX 5 Page 3

10. In a four year project, which is a time-slice of an ongoing program, with the resources envisaged some 6,200 officials and IUA Reps would receive training. Year one will be largely devoted to construction, procurement and instructor training but several pilot courses would be held. The training objective is to establish a clear understanding of the requirements and methods for inter-farm irrigation system operation and maintenance and the roles and functions which each group would fulfill. The training would be conducted from mobile training units with extensive use of audio-visual media prepared for this purpose. Training format would employ lecture, reference materials, group discussion and local field trips as well as A/V materials.

11. Target Group C consists of about 80,000 key farmers and village leaders (4% of the 2,000,000 rural families). In a four-year time-slice about 6,700 of this group would receive three seeks of training. The training objective would be to establish a clear understanding of the need for effective operation and maintenance of their inter-farm irrigation systems and the methods and resources required to carry out O&M. Training would be held at 11 training centers by especially trained instructors. Training format would use lectures, demonstrations, discussions, local field trips and multi-media audio-visual materials prepared on this subject.

12. The project would be implemented by PROSIDA under the general direction of DGWRD with the Project Manager and small central staff in Jakarta. A steering committee with representation from Agriculture-DGFCA, Interior-DGRD and Public Works-DGWRD would be established. Three subproject managers would be located in Surabaya, Cirebon and Ujung Pandang each of which would have a training site and one or more satellite training sites or training centers. There would be a total of eleven training sites, of which eight would be satellite training centers. Each subproject would have a 300 sq m office and service facility. Each training site would have a 380 sq m training facility consisting of a classroom, dormitory, food service, office, and storage with a capacity of 40 trainees. A total of 5,380 sq m of civil works would be constructed. Each training site would consist of a chief, a training officer, 6 instructors (of whom 3 would operate the MTU), and administrative and support personnel.

13. In addition to its ongoing media development task, the Audio-Visual Training Project (PLAV) in Surabaya assisted by consultants would assume responsibility for training and instructors (80) and training officers (20) required to implement the program. Instructors and training officers would be selected from middle level officers of DGFCA, DGWRD, DGRD and possibly Education. They would be assigned full time to the project for a year or more of duty. In addition to instructor training, PLAV would prepare training materials for the project, provide advisory services and using audio-visual techniques would hold prior training courses for irrigation -76 - ANNEX 5 Page 4

personnel in East, Central and West Java, Sulawesi and West Sumatra as the third phase of PLAV activities. The Surabaya subproject will be located adjacent to Diklat IV and work in collaboration with its staff. It is also adjacent to PLAV.

14. Cost summaries by main categories are presented below:

COST SUMMARY

Equivalent Foreign FY Rp x 106 $ million Exchange % $

1. Training (a) Middle level officials (2,000) 0.23 (b) Local officials and WUA (6,200) 0.47 (c) Key farmers and lurahs (6,700) 1.68 (d) Instructors (80) and Training Officers (20) 0.10

Subtotal 1,550 2.48 15 0.37

2. Equipment and supplies 469 0.75 0.75

3. Civil Works 462 0.74 0.24

4. Consulting services (120 m/m) 937 1.50 1.08

Total base costs 3,418 5.47 45 2.44 -77- ANNEX 5 Page 5

COURSE CAPACITIESAND COSTS

TARGET GROUP A -- Middle level officials

BASIC DATA:

A. Total target group, 6,000 F. No. of centers required - 6. B. Project target group, 2,000 G. No. of course per yr/center-22. C. Training objective-orientation H. No. of instructorsper course - 2. and secure program commitment I. Lecturer honorariumRp 7,000/day D. Course duration 1 week (5 days) J. Course Format-orientationand E. Course enrollment - 20 seminar.

Unit Cost No. times No. Item (Rp) per course units Total (Rp)

Instr. Materials 5,000 1 20 100,000 Instr. Honoraria 7,000 5 2 70,000 Instr. Travel 15,000 1 2 30,000 Instr. per diem 5,000 5 2 50,000 Particip.Travel 15,000 1 20 300,000 Particip.per diem 5,000 5 20 500,000 Fuel per operation 200,000 1 1 200,000 Adm. & overhead 60,000 1 1 60,000 Health & misc. 130,000 1 1 130,000

Cost per course Rp 1,440,000= $2,300

. 20 = Rp 72,000/trainee,- 20 = Rp 14,400/traineeday = $115/trainee = $23 per trainee/day

Training cost of 2,000 persons = Rp 144,000,000 100 courses @ $2,300 = $230,000

This target group would be trainedwithin the first 1 1/2 years of project operation. -78 - ANNEX 5 Page 6

COURSECAPACITIES AND COSTS

TARGET GROUP B - Local Level Officials and WUA Reps.

BASIC DATA:

A. Total Target Group Local Offic. 6,400 D. Course enrollment - 37 P3A's 12,000 E. No. Mobile to Units - 8 B. Project Target Local offic. 5,000 G. No. Courses/Unit/Yr - 7 C. Training Objective - establish H. No. Instr./course - 3 common understanding of Irrig. O&M I. Instructor annual salary D. Course duration-3 wks. (18 days). Rp 1,600,000 /a

Unit Cost No. times No. Item (Rp) per course units Total (Rp)

Instr. Materials 5,000 1 37 185,000 Instr. salaries 10,000 18 3 540,000 Drivers' salary 4,000 21 1 84,000 MTU Crew/diem 5,000 20 4 400,000 MTU Opr. cost /b 200,000 1 1 200,000 MTU Maint. /c 140,000 1 1 140,000 Adm. & Overhead 138,000 1 1 138,000 Misc. (at 5%) 70,000 1 1 70,000

Course per course Rp 1,757,000 = $2,810 e 37 = Rp 47,500/trainee - 18 = Rp 2,640 cost/trainee day = 76/trainee = $425/trainee/day (rounded)

Cost of 168 courses in 3 years = $472,000

Coverage - at 22 local officials per course x 168 = 3,700 at 15 P3A's per course x 168 = 2,500.

/a Instructors would be drawn mainly from middle level ranks of Agriculture, Irrigation and Home Affairs and assigned full time as instructors. Salaries expressed at Rp 10,000 per day are estimated by annual work days (230) x 7,000 - 160 teaching days.

/b Includes fuel for generator

/c Based on 10% of purchase cost per year divided by number of courses. - 79 - ANNEX5 Page 7

COURSECAPACITIES AND COSTS

TARGETGROUP C - Key Farmers and Village Leaders

BASIC DATA:

A. Total target group 80,000 E. Course enrollment - 40 B. Project target group 9,000 F. No. of training centers - 11 C. Training objective: to under- G. No. courses/center/yr - 7 stand importance of irrigation H. No. instructors/course - 3 O&Mand assume responsibility I. Instructor annual salary D. Course duration - 3 wk (18 days) Rp 1,600,000

Unit Cost No. times No. Item (Rp) per course units Total (Rp)

Instr. Materials 5,000 1 40 200,000 Instr. Salaries 10,000 18 3 540,000 Participant travel 15,000 1 40 600,000 Partic. partial per diem 1,000 1 40 800,000 Accom. & food 4,000 20 40 3,200,000 Utilities, fuel, etc. 200,000 1 1 200,000 Admin. & overhead 550,000 1 1 550,000 Misc. (at 5%) 275,000 1 1 275,000

Cost per course Rp 6,365,000 = $10,000 (+) i 40 = Rp 160,000 cost/trainee . 18 = Rp 8,900 cost/trainee/day = $256 cost/trainee = $14 cost/trainee/day

Cost of 168 courses in 3 year period = $1,680,000

Coverage of 80,000 target group (4% of 2,000,000 farm families) would be 6,700 in 3 plus years or 8% of target group. -80-- ANNEX 5 Page 8

COURSE CAPACITIES AND COSTS

STAFF TRAINING - Instructors

A. Required No. 66 E. No. course - 4 B. Training objective: effective F. Instr. PLAV & Diklat IV staff skills in lesson planning, preparationand AV skills. C. Course duration 6 weeks D. Course enrollment - 20

INSTRUCTORS

Cost comparableto Target Group "A" - i.e. Rp 1,440,000 ($2,300) per week. 4 course x 6 weeks = 24 weeks Rp 34,560,000= $55,300.

TRAINING OFFICER TRAINING

A. Required Number - Min. of 11, plus 5 for supervision. B. Training target - 20. C. Training objective: skills in lessson and course planning,presentation and AV skills coordination,management and supervisionof training. D. Course duration - 8 weeks E. No. of courses 1, plus refresher seminars F. Instructionby PLAV and Diklat IV staffs

Cost comparable to Target Group A - i.e. Rp 1,440,000/week($2,300). 1 course x 8 weeks = 8 weeks at Rp 1,440,000 = Rp 11,520,000 = $18,400

Instructorand Training Officer Costs rounded to $.1 million including refreshercourses. -81 - ANNEX 5 Page 9

EQUIPMENT

A. Water User Training US$ 1. Preview discussion and sound system equipment- Project Headquarters 90,000 2. Telex and AV equipment for Serang, Cirebon and Ujung Padang 90,000 3. Slide tape equipment for 11 training facilities 14,000 4. Vehicles a. Eight Mobile TrainingUnits (25,000) $200,000 b. Two land cruiser cars (12,670) 25,000 c. Eight land cruiser cars (10,000) 50,000 d. Twenty motorcycles (1,200) 24,000 rounded 299,000

B. PLAV Phase III 1. Word processor (2 terminal, 1 printer 47,000 2. Equipment replacement& maint. 70,000 3. AdditionalA/V Equipment (Provinces) 10,000 4. Program production,reproduction 125,000

252,000

Total $745,000 - 82 - ANNEX 5 Page 10

CIVIL WORKS

1. Office and storage space for 3 subprojectsand additional space for PLAV - 4 units of 300 sq m = 1,200 sq m x Rp 100,000 - 625 192,000 2. Nine training facilities of 380 sq m = 4,180 sq m x Rp 100,000- 625 547,200

Total 739,000

(rounded to) 739,000

EXPATRIATECONSULTING SERVICES

I I I I _ M/IM/M I 1982/83 1 1983/84 1 1984/85 1 1986/87 11986/87 1

ITeam leader I 48 1 1 1 1 1 1 IMedia Spec. 1 18 1 112 1 1 1 6 1 1 1 I Ag./Rur. Soc. 1 12 1 _I 12 i I I I ITraining Spec.l 24 1 118 1 1 1 3 1 3 I I I Info. Analyst I 9 I 91 I 1 I IShort Term /a I 9 1 3 1 3 1 3 1 1 1

Total 1 120 1 45 1 36 1 24 1 15 1 1

1 Ai _ _ _ __ I _ _ _ _ I _ _ _ _ I _ - _

/a Some of these consultantmonth might be converted to local consultant services for evaluation work.

120 M/M x 12,500 = $1,500,000 -83 - ANNEX6

INDONESIA

IRRIGATION XVI PROJECT

Statements of Expenditure

1. Statements of expenditure will be used for disbursements against the following:

Item Loan Amount

(a) Tertiary networks at Sitiung II $2.0 million

(b) Water user training, including facilities, training materials, per diems and lecturer honorariums $3.1 million

2. Tertiary network construction will be procured through a number of small contracts because of the nature of the work. The contracts will be held by PIBD. Disbursements will be made against quarterly statements submitted by PIBD summarizing progress payments made against such contracts, accompanied by certification of the PIBD site engineer that the work had been done properly.

3. For water user training, each year PROSIDA will agree with Bank on standard per diems and lecturer honorariums. Quarterly statements of expenditure will be submitted by PROSIDA which will keep evidence of payment for such items, together with cancelled invoices for training materials and small contracts for upgrading facilities.

4. PROSIDA and PIBD have considerable experience under previous Bank loans in preparing statements of expenditure and withdrawal applications. All statements of expenditure will be subject to auditing requirements established for the project. Supporting documentation will be subject to periodic review by routine Bank supervision activities. - 84 - ANNEX 7 Page 1

INDONESIA

IRRIGATION PROJECT XVI

Related Documents and Data Available in Project File

GENERAL REPORTS AND STUDIES RELATING TO THE AGRICULTURE AND IRRIGATION SECTOR

1. World Bank "Commodity Price Forecast", May 1979.

2. World Bank "Indonesian Growth Patterns", Report No. 2093-IND, February 1979.

3. World Bank "Indonesia Irrigation Program Review", Report No. 2027a-IND, October 1978.

4. World Bank "Indonesia Supply Prospects for Major Food Crops", Report No. 2374-IND, March 1979.

5. World Bank "Project Performance Audit Reports" 2047 and 3269 dated 5/5/78 and 12/31/80.

GENERAL REPORTS AND STUDIES RELATING TO THE PROJECT

Sitiung Irrigation Stage II

1. Sir William Halcrow & Partners (SWHP) Consulting Engineers: "Sungai Dareh - Sitiung Irrigation Project, Integrated Rice Rubber Study, Feasibility Report" July 1980, Main Report (1 Vol., July 1980) and Annex (1 Vol., August 1980). (filed under Irrigation Project IX).

2. SWHP: "Sungai Dareh Sitiung Irrigation Project Feasibility Report" August 1979, 8 Volumes (filed under Irrigation IX).

Designs and Studies

1. Cisanggarung (West and Central Java)

SWHP "Design Drainage Project, Pemali-Comal subproject", main report 1 Vol.) and Annexes 4 Vols.) April 1981.

Bank pre-appraisal mission, Project File on Padakaton subproject, February 1981. - 85 -

ANNEX 7 Page 2

SWHP, "Up-dated Feasibility Report", June 1978, 9 Vols. (filed under Irrigation XII).

2. Jatigede (Central Java)

SMEC "Updated Feasibility Report" December 1981.

3. DGWRD's Management Information Systems: "MIS proposal", M4ay 1981.

4. Hydrological Data: Institute of Hydraulic Engineering "draft Invitation Document of consulting services for improvement of Hydrologic Data Collection, processing and evaluation in Indonesia, Stage II", June 1981.

Water User Training

PROSIDA: "TOR of consulting services for the Development of Audio Visual Aids Training Project in Surabaya", June 1981.

PROSIDA: "Invitation for consulting services for Training of Water User', June 1981.

Sagardoy, Adams, Bottrall, "Integrated Water Management Training Project - preliminary draft of FAO project document", March 1981.

DGWRD, "Project Presentation for the Continuation of the Audio Visual Aids Training project at Surabaya, Phase III", October 1979. INDONESIA IRRIGATION PROJECTXVI Organizationof the DirectorateGeneral of WaterResources Development

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